June 25, 2019

Apple leases all of Kilroy's 333 Dexter offices

Renderings by Miller Hull [enlarge]

The 12-story, two-building complex could house over 4,000 employees once it’s filled. No word on whether Apple plans to sublet space.

[enlarge]

An east-west connector and public plaza will separate the two towers.

Apple has leased all 630,000 square feet of office space — and apparently the ground-floor retail, too — at Kilroy Realty's 333 Dexter, which is now in the late stages of construction. Representatives from both companies, along with Seattle Mayor Jenny Durkan and other local dignitaries, announced the news on Monday. The press conference took place at 333 Dexter Ave. N., the full block that Kilroy acquired from KING Broadcasting in 2015 for about $42.6 million.

Both Durkan and Apple's Kristina Raspe called the two-building South Lake Union block a “campus,” which may imply more than just office space. Kilroy deferred all questions about the retail to Apple, which didn't immediately comment.

“Our ambitions have grown,” said Raspe, the company's vice president of global real estate and facilities. Apple says that it has doubled prior expansion plans for Seattle, where it now has around 500 employees at Two Union Square. In December, Apple had said that, over the next three years, it would be opening offices with about 1,000 new employees each in Seattle, San Diego and Culver City, California.

The new goal for Seattle is 2,000 new employees over five years. Most of those jobs will be in software and hardware engineering; Apple Cloud was specifically mentioned.

“Seattle will become a key engineering hub,” said Raspe. “We know there is so much talent in Seattle. We're actively recruiting. Your leaders have created a vibrant economy.”

Apple didn't say precisely when it will occupy 333 Dexter, where Kilroy expects to finish the shell and core by the end of this year. Neither company cited a target date for tenant improvements or occupancy. Nor was there any indication if Apple might sublet some of the office space on an interim basis. When filled, 333 Dexter could accommodate over 4,000 employees.

JLL's Lisa Stewart, Cleita Harvey and Joe Gowan leased the space for Kilroy, which broke ground on the project two summers ago. It includes an east-west connector and public plaza separating the two towers, which contribute about 19,000 square feet of public space to the project.

The 12-story, two-building complex was designed by Miller Hull, with Swinerton Builders as the general contractor. Most floor plates have about 27,000 square feet. Levels two through four, above the pedestrian connector, each have about 62,000 square feet. The building is intended to meet LEED Platinum certification. Raspe said that 333 Dexter would get all of its power from renewable sources.

It's been widely reported that Apple was looking to increase its footprint in Seattle. There were prior rumors of Apple's possible interest in Rainier Square (space that could be subleased from Amazon). Oracle is also rumored to be seeking a big downtown suite of offices.

Mayor Durkan said of Apple, “I'm suddenly much more interested in talking about HQ2 — a new HQ2.” Unlike Amazon's search for its HQ2, however, Apple has demanded no incentives or tax concessions from potential candidates.

“Our values are so aligned,” said Durkan of Apple and the city, which she called “a growing economic and tech superpower.” She also recalled buying her first Macintosh computer in 1985.

Marilyn Strickland from the Seattle Metropolitan Chamber of Commerce said that Apple's announcement served to notify other companies “that Seattle welcomes your expansion here. We're players. The world is watching us.”

While JLL was previously leasing the 15,000 square feet of retail, restaurant and commercial space at 333 Dexter, Kilroy said that the future disposition of that space was up to Apple. That company opened its first local store at University Village in 2003 (which it last year replaced with a completely new store). There are also Apple stores at Bellevue Square, Southcenter, Tacoma Mall and Alderwood. A hypothetical new store in SLU would place it in the center of tech workers from Amazon, Facebook and Google.

The 333 Dexter block is bounded by Dexter, Harrison and Thomas streets and the new Seventh Avenue (formerly Aurora Avenue North). It benefits from the newly restored street grid connecting SLU to Seattle Center and Uptown.

The project also has about 830 parking stalls on five underground levels, plus 340 bike stalls and related amenities for bicycle commuters. Roof decks will total about 24,000 square feet.

The 333 Kilroy team also includes CPL, civil engineer; MKA, structural engineer; Glumac, mechanical and electrical engineer; and Hewitt, landscape architect.