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January 8, 1999

Real Estate Buzz

By MARC STILES
Journal real estate editor

Drugstore.com heading to Sunset? . . . Boeing's search for a sublessor of approximately 90,000 square feet of office space at Obayashi's Sunset Corporate Center in Bellevue is said to be nearing success.

The rumored, soon-to-be tenants are: drugstore.com, the 9-month-old firm now in Redmond's Willows neighborhood; Western Wireless; and a third, unnamed company.

Drugstore.com, according to our sources, is to take two floors at 30,000 square feet apiece. Western Wireless is taking a half floor, and the mystery firm is taking the remainder.

We checked with Boeing and drugstore.com, and spokeswomen for both confirmed nothing. Still, their statements sure sound as though something's close.

Said Boeing's Carol Holley: "You know that these deals are so competitive that until signatures are on the pages that there's no such thing as a done deal."

Added drugstore.com's Debby Fry Wilson: "It is certainly space we are looking at." But, she cautioned, it's premature to say anything is certain.

That the space is going is no great surprise given the rock-bottom vacancy rate along the I-90 corridor.

The rate, however, is creeping up, according to CB Richard Ellis' fourth quarter report. At the end of quarter three, it was 1.76 percent but has now inched up to 4.4 percent as the Lakeside Building and Wright Runstad/Equity Office Properties' Sunset II opened with what the CB report called sizeable vacancies.

Now all Boeing needs to do is find buyers for the 2.2 million square feet of office and industrial space mostly in the South End.

Dollar Development... is not going to throw the Seattle office inventory out of whack with its project at 1900 Boren Ave.

On Sunday, the landmark church was razed as a reporter for the Seattle Times observed and took notes for a story on Monday. The resulting article said Dollar, which is loosely affiliated with Dollar Rent-A-Car, plans to build "an office." The piece didn't say how big that office will be.

Landlords can relax. According to Dollar Development's James Cassan, the plan is to build a small car rental office and parking lot.

Over at Meydenbauer Place in Bellevue... Leasing of the 300,000-square feet of retail/entertainment space in the proposed mixed-use project continues at an apparent torrid clip.

Two rumored tenants: The Cheesecake Factory and Il Fornaio. Our source: an Eastside broker.

The Cheesecake Factory operates 26 upscale-but-casual dining restaurants from Boston to Southern California but has no outlet in the Pacific Northwest. It was started in the late 1940s in Detroit. Owners Evelyn and Oscar Overton moved the business to Los Angeles in 1972 and opened their first full-service restaurant in Beverly Hills. The company went public seven years ago and is traded on the NASDAQ under the symbol CAKE.

Il Fornaio was founded as a baking school in Italy in 1972 and is now a West Coast chain that opened a restaurant at Seattle's Pacific Place this fall. Maurizio Mazzon, the executive chef in Seattle, once cooked for the Pope.

Seattle boosters... will be sorely disappointed that their Central Business District did not make Oncor International's top five highest rental rate list. It was included in the company's 1998 Year-End North American Office Market Report.

Atop the list was San Francisco at $43.31 a square foot followed by Boston at $41.58, Manhattan at $41.12, Washington, D.C. at $37 and Silicon Valley at $36. And Seattle? It finished at $30, a 6 percent decrease for the year.

For the self-absorbed among us who need to feel important, Oncor offers this tidbit: Fully 60 percent of the markets had year-end vacancy rates below 10 percent with the West Coast cities of Portland (4.77 percent), Seattle (3.6 percent) and San Francisco (3.24 percent) reporting the lowest figures.

Dallas Cowboy legend Roger Staubach... will be in town Tuesday for a private reception at the new offices of Staubach Retail Services. Perhaps he'll bring news about when his company will open the branch of Staubach Corporate Services here to serve industrial and office clients.

Making way for the third runway... at Seattle-Tacoma International Airport requires the purchase of 386 single-family residences and roughly 250 apartment units. Airport officials earlier this year made major progress with the acquisition of 234-unit Lora Lake Apartments at Des Moines Memorial Drive and state Highway 518.

The apartments went for $13.5 million, or $57,692 per unit. No demolition date has been set, according to an airport spokesman.

We assume she'll make house calls... Stacy Porter, M.D., that is.

The doctor has joined the Queen Anne office of Windermere Real Estate. She graduated from the University of Iowa's School of Medicine about 18 months ago and moved to Seattle where she will study ophthalmology at the University of Washington. That won't be for about a year, however, so she decided to take up real estate.

"It's always been an area I've been interested in," she said. She plans to study and peddle property simultaneously. "Hopefully, I'll be able to continue both. I'm used to putting in a lot of time."



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