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February 19, 1999

Real Estate Buzz

By MARC STILES
Journal real estate editor

Waterfront sites getting scarce ... Development chugs along on Seattle's central waterfront but not for much longer thanks to the land shortage. CB Richard Ellis broker Dan Dahl is marketing what he says is one of the neighborhood's last pieces of developable properties: Intercorp's sales office for its now-finished Water-front Landing condominium project.

The portable office sits on 4,200 square feet of land, and the asking price is about $800,000.

"After the World Trade Center project is done, where can you build?" Dahl asked.

The small size of the lot could be a hindrance. As Intercorp Executive Vice President Jim DeFranco wryly noted, "You couldn't put Amazon.com there."

Dahl said the parcel could be combined with two other adjoining parcels. The first is a 13,250-square-foot parking lot that Jonathan Whetzel owns. The other is a city-owned, 7,000-square-foot parcel. Together, they could accommodate development of a 60,000-square-foot office building, he added.

Bentall is blooming... in a really big way and credit goes to the Puget Sound area where roughly 60 percent of the Vancouver, B.C. developer's holdings are located.

Earlier this week, Bentall announced its total revenue for 1998 increased a whopping 84 percent to $188.9 million (Canadian). Of the $86.1 million increase, rental income from Bentall's Seattle-area office portfolio accounted for $45.5 million.

The balance came from the existing property portfolio and Bentall's expanded real estate services and asset management businesses, as well as the $26 million sale in March of the Montebello Apartment House in Kirkland to BRE Properties.

Bentall's net income for 1998 grew 67 percent and cash flow from operations increased 76 percent over 1997. Cash flow was $1.81 per fully diluted share last year compared to $1.32 in 1997, an increase of 37 percent.

Bentall owns a net 4.5 million square feet interest in a 6.4-million-square-foot portfolio. It also manages another 28 million square feet for third parties.

In the Seattle area, attention is focused on the impending sale of Bentall's nearly 26,000-square-foot Park East Business Center in Redmond. Bentall officials confirm the property is under contract, and talk on the street is that the deal should be done by the end of the month. No rumors yet on who the buyer is.

Meanwhile, Bentall continues construction of Four Newport, the first of two additions to the Newport Corporate Center along Interstate 90 in Bellevue, and the first three of six buildings at Millennium Corporate Park in Redmond.

Gary Carpenter, chief operations officer of Bentall's U.S. division, has quashed rumors that the company is ready to begin building the 600,000-square-foot Summit Ridge II in Bellevue's Central Business District. Bentall will allow the frenzy in that sub-market to continue without its participation, he said.

Cork all talk... about the Rainier Brewery's future until Pabst actually finishes the deal to buy the Seattle landmark from Stroh. Pabst has announced it doesn't need the brewery's capacity and probably will close it.

The cork-it caution comes from Lacey Logan, Stroh spokeswoman. "It's still 60 days away," she said. "I don't want everybody jumping the gun." Production at the plant will continue for up to nine months.

Even so, there already have been a number of inquiries about the prominent parcel that abuts Interstate 5. The shortage of available close-in industrial space and the large size of the property are the reasons for the interest. Stroh has not released the particulars, but the site is said to be between 4 and 5 acres.

Inquiries have come from developers, brokers and "other manufacturers," whom Logan would not name. One of the rumors has a bottled water company looking at the site.



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