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February 4, 2005
Rendering courtesy of Vulcan Inc.
There will be 100 housing units and 300,000 square feet of what Vulcan calls "high-performance office space."
Vulcan Inc.'s announcement yesterday of a 450,000-square-foot project at Westlake and Denny caught commercial real estate watchers by surprise.
While Vulcan has been pursuing a slew of projects in the South Lake Union neighborhood, not a peep had been published about this one. One broker who works the territory and a competitor both said they hadn't heard of the proposal until yesterday.
It's a two-tower project. The north building will be 11 stories and the south 18 stories.
It will have 17,000 square feet of retail, 100 residences and 300,000 square feet of office. That seems like a staggering amount for a market with a 15 percent office vacancy rate.
"We believe the office market is in recovery mode," says Ada M. Healy, vice president of real estate for Vulcan, Paul Allen's asset management company. Construction could start by the end of the year, Healy said, and by the time the project opens in late 2007 or early 2008, demand for office will be significant.
The project will be what Healy calls "a high-performance office building." Large windows will allow more natural light into the building than those found in older offices. Plus an under-floor heating, cooling and ventilation system will allow users more control over the temperature in their space.
"This will distinguish it from older product in the market that represents a lot of the vacancy," Healy said.
The site is across Westlake Avenue from 2200, another major Vulcan project that is under construction. Vulcan and Milliken Urban Limited Partnership are building the $200 million, project that will have condos, Pan Pacific Hotel, Whole Foods Market and other retail.
"They are really fortifying that corner there," said Keoni Fursse, a broker at Fursse & Hall Realty. "You really would have to think that they have (an office) tenant in tow," he said.
Vulcan is handling the leasing.
"We are actively marketing the space to a number of users," said Healy. "We are highly confident in the market's recovery and we are highly confident with the interest we have received at 2200 Westlake. As a result, we are moving forward aggressively."
Fursse said Vulcan's announcement is another indication Seattle's office market is migrating from the financial district to the Denny Triangle, home of the new $171 million federal courthouse.
Longtime Seattle development company Clise Properties this fall unveiled plans for a development similar to Vulcan's latest. Schnitzer Northwest and Touchstone, two Seattle area developers, also have office projects planned nearby.
Clise's 34-story Seventh Avenue at Westlake will have residential units atop 250,000 square feet of office and some retail. It might be completed as soon as 2007, according to Clise President Richard Stevenson.
"We could start construction in July or August," he said. "Optimistically, we will lease it up enough to kick it off by then."
Stevenson is unsure how much office preleasing is needed before Clise will start. "I think it depends on who the tenant is," Stevenson said. "We are a very conservative company. My guess is we'd want to have it at least 50 percent preleased."
The Vulcan proposal consists of a retail and office podium with separate office and residential towers above. Retail will occupy the first stories.
Office space will be on the podium levels (floors two through five) of both buildings. More office will be on floors six through 11 of the north tower, and residential units will be on floors six through 18 of the north building.
A Vulcan spokesperson said it is too early to say if the residences will be rentals or condos.
Callison is the project architect, and Sellen Construction is the general contractor.
The project will have energy and water-saving fixtures and be built with environmentally sensitive materials. Vulcan plans to seek LEED accreditation.
Healy declined to say how much the building will cost.