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February 5, 1999

Real Estate Buzz

By MARC STILES
Journal real estate editor

Developers vie for NCR Center ... Rumors are swirling about the sale of the NCR Center, a 49,000-square- foot office building in Bellevue, and the more the story churns the more interesting it gets. Alas, the subject of the stories, longtime developer Bill Summers of Keystone Development, says the tales are untrue.

Word on the street is that Summers has under contract the NCR Center, 15400 S.E. 30th Place, for $7.1 million. Summers confirmed that he is one of 15 potential buyers but said he does not have the building tied up.

One comment, however, indicates he could be closing in on the deal. "It's not true yet," he said of the under-contract talk.

"Every day things change," Summers said. Complicating things is geography. NCR officials are in Ohio and their broker also is back East.

That Summers is the rumored buyer comes as a shock because he is said to be up against institutional buyers, such as Spieker Properties.

Yet another rumor explains where he might be getting the advantage that allows him to compete with the biggies. This one involves last month's sale of the old TCI Cable building in Bellevue.

Summers reportedly got that 28,000-square-foot building, 2233 112th Ave. N.E., under contract for $3.46 million before flipping it to Parker, Smith & Feek, one of the largest independent insurance brokerages in the Northwest, for $4.85 million. According to the chatter, Summers is investing this alleged and amazing profit into the NCR Center.

"That's not really the case," Summers said. He explained he was indirectly involved in the sale as a consultant for Parker, Smith & Feek. "It was not a flip." He did not elaborate.

Evidently, it was a group of private investors that reaped the big profit, according to a source familiar with the deal. The investors' names were unavailable.

Parker, Smith & Feek, by the way, got its start during the Depression right here in the Journal Building, 83 Columbia St. It has since moved on and is preparing to leave rent-rich downtown Seattle later this year for its new home in the old TCI building.

Who's got what hotel..? There has been plenty of speculation over which hotels are going into what rival mixed-use developments in Bellevue. Part of the answer may be revealed March 3.

That is the date that Ian Gillespie, developer of the $300 million Lincoln Square, is aiming to hold a press conference to announce his development's hotel.

It is the latest in the musical chairs game being played by hotels and their suitors: Lincoln Square and the $400 million Meydenbauer Place.

When we last checked, Meydenbauer Place developers Jeff Rhodes and Ken Himmel were said to be so worried about the possible glut of new office space in Bellevue that they replaced the office component of their project with a second hotel. Marriott was rumored to have left Lincoln Square for Meydenbauer where it would build next to the planned 550-room Westin Hotel.

Now the talk is that Westin is back at Lincoln, but there's no confirmation. So just wait until March.

Hines' $500 million... equity fund should be enough to get firm's 112th @ 12th office project going, but rumors about a preleasing requirement persist. Such talk ties the patience of broker Bret Jordan, who along with Terry Wirth, his Colliers International colleague, is marketing the 478,000-square-foot project in Bellevue.

"We don't have to have preleasing," Jordan said. "It's an all equity deal."

Preleasing would, of course, get the project rolling. Jordan said that should he and Wirth sew up deals for one-quarter of the project, Hines project manager Rob Hollister could proceed with construction. If the brokers don't make that mark, then top Hines executives would have to give the OK.

Jordan is confident demolition work will begin as scheduled May 1. "We have enough interest in the project to fill it," he said. "The challenge is to convert it to preleasing."

At the altar... or getting there soon are Colliers International and InsigniaESG. This is the latest in commercial real estate's trend of big brokerages merging.

Colliers Vice President and Seattle Branch Manager Rob Aigner said a merger -- not an acquisition -- has been brewing for months. "But it's still a jump ball. We won't know for a couple of months."

He added merging would be good for both parties what with InsigniaESG's strength on the East Coast and Colliers' West Coast presence. "It's a real nice fit," he said. "What we'd look like post merger remains to be seen."

So many Martins... Here's an old one that's too good to go unmentioned. At the recent CB Richard Ellis Forecast Breakfast, speaker Kim Snyder of Deloitte & Touche commented that Martin Smith was in the crowd when he was not. Snyder meant to recognize longtime Seattle developer Martin Selig, who was there.

It's easy to understand the foulup. Selig is a noted Seattle developer. By contrast, Martin Smith Real Estate Services was until recent years more your quiet property management firm. Now Greg Smith, his brother Mickey, and Jeff Roush have made their mark as downtown developers and changed the image of the family firm.

Greg Smith capitalized on the situation when after the speeches he approached Selig as a long, lost parent. "Hey, Dad," he remarked. "How's it going?"



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