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Real Estate Editor
October 4, 2007
A limited liability company associated with Touchstone Corp. has purchased a building adjacent to the Stewart Place site Children's Hospital bought for its new pediatric research institute. Touchstone and others sold the site to Children's.
Touchstone bought the Manifesto Glass Blowing Studio building at 1013 Stewart St. for $3.6 million from Douglas G. Varey, Lynne Varey and Harold Kawaguchi, according to public records. That equates to $635 a foot for the 5,670-square-foot structure, which was built in 1920, or $531 a foot for the 6,780-square-foot lot.
A representative of Boilermakers Local 104, Seattle Labor Union, which owns an adjacent building at Stewart Street and Boren Avenue, said Touchstone has approached it about buying that structure.
Gary Powers, business manager for the local, said Touchstone indicated it wants to construct a large building there. Over the last two years, Powers said, the local has been approached by about eight developers interested in buying its building — and as much of the block as is available from other owners.
The west side of Boren between Stewart and Howell streets, where the two buildings are located, is zoned for construction up to 400 feet for residential-only or residential/commercial, or up to 340 feet for commercial-only.
The Boilermakers local is getting an appraisal for its building, which Powers said is as large as the Manifesto. Its executive board will then decide whether to sell or hold it. The highest price offered so far is about $4.2 million, Powers said.
“We're not in any hurry. We own the building outright,” he said. The local leases out the building, which shares a common wall with the Manifesto, Powers said.
Touchstone didn't return a call for comment.
In May, Children's Hospital bought the block known as Stewart Place, which is bounded by Virginia Street, Boren Avenue, Terry Avenue and Stewart Street. Children's is developing an institute aimed at fighting pediatric disease in the area.
Kauri kicking tires on Lake City Way
Kauri Investments has purchased a site at 11548 Lake City Way N.E. that Bill Pierre Chevrolet now leases. Seattle-based Kauri is considering a large mixed-use project as one option for the site, said President and CEO Kent Angier. It is zoned for construction up to 65 feet.
Kauri paid Charles G. Anderson $3.1 million for the 39,300-square-foot site. It houses a 31,100-square-foot building constructed in 1955, according to public records. That equates to nearly $79 for the land or about $100 a square foot for the structure.
The Bill Pierre dealership will continue to lease there for several months before moving to another site it owns in the area, Angier said.
Kauri may reposition the building and lease it and the rest of the site long term to an auto-related tenant, he said. Or it may build a project with 130- to 140 residential units, likely apartments, on part of the site and lease the building. Plans are still preliminary.
“We're kicking around some ideas,” he said.
The area is transitioning from car dealerships and older commercial buildings to mixed-use and has good access to the University of Washington and downtown Seattle, he said.
“It's improving I guess is the best way to put it,” he said.
The purchase is part of a 1031 exchange, Angier said.
1 Hotel going after Four Seasons
The head of Starwood Capital Group Global said its 1 Hotel brand will be on par with the Four Seasons.
“I think the rooms are as good or better,” said CEO Barry Sternlicht. The rooms will be twice as large as is standard, he said.
Sternlicht was in Seattle recently for an event promoting 1 Hotel & Residence at Second Avenue and Pine Street. It will be the first 1 Hotel, which is being marketed as a luxury, eco-friendly hotel chain. The 23-story project, which broke ground in June, is being developed with Portland-based Avalon Holdings. It will have 176 condo-hotel units and 51 traditional condos.
Seattle's hotel market overall has never been that strong because of its seasonality, Sternlicht said. But projects such as 1 Hotel may help, he said, with downtown office workers, baby boomers and suburbanites buying and/or staying in the units, lured partly by the hotel's amenities.
“I think the baby boomers like the serviced residential,” he said.
Sternlicht expects the hotel market nationally to slow because of a softening economy. He also said some announced hotel/condo projects won't get built because “it's virtually impossible to get construction loans right now.”
Other 1 Hotel projects are planned for a number of cities, including Paris, Fort Lauderdale, Fla., Scottsdale, Ariz., and Mammoth Lakes, Calif.
Apartment vacancies falling
The Puget Sound region's apartment vacancy rate is 3.8 percent, down from 4.3 percent in March, according to Dupre + Scott's latest Apartment Vacancy Report, which looks at properties with 20 units or more. That rate excludes vacancies in new projects still in lease-up and properties undergoing significant renovation.
The firm said the low rate is partly due to strong regional job growth and in-migration. Other factors include rising home prices that make renting look good, and the loss of a record number of units to condominium conversions. Additionally, turmoil in the financial markets makes it harder for potential home buyers to get financing.
Dupre + Scott said apartment investors face the risk of condominiums, conversions and single-family homes showing up in the rental market because of the softening for-sale market.
The average rent in the region is $930, up 8.6 percent from $856 a year ago, the firm said.
Lynn Porter can be reached by email or by phone at (206) 622-8272.
Got a tip? Contact DJC real estate editor Brian Miller at email@example.com or call him at (206) 219-6517.