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September 17, 1999

Real Estate Buzz

By MARC STILES
Journal Real Estate editor

Ian Gillespie, whose Westbank Projects Corp. is gearing up to build the mixed-use Lincoln Square development in Bellevue, is scheduled to address the Downtown Bellevue Association Sept. 28. (See details under the Upcoming events in today's People & Companies column.) Among Bellevue observers, the rumor is that the Vancouver, B.C., developer will use the opportunity to announce who's financing the $300 million project.

Don't hold your breath, Bellevue.

"I was thinking about that for about an hour as I was driving down this morning," said Gillespie, who was in town Thursday. The Canadian is bewildered by Yanks' proclivity for hype; he wants to merely go about his business without making a splash. "I'm just questioning whether I'm going to even bother [announcing anything]. Besides making good newspaper copy I'm not sure it really does anything for me."

As it now stands, Lincoln Square, which is to go up east of Bellevue Square, entails a 28-story, 500,000-square-foot office tower and a second, 40-story tower. The latter will have a six-level podium supporting 14 floors of Westin Hotel rooms below 20 stories of condominiums. The project also includes about 200,000 square feet of retail.

Gillespie does say that financing is lined up, but he won't name the lender until the finishing touches are on the deal. Leasing the office tower has gone extremely well, although he wouldn't name the one large tenant and three smaller ones he says will be the first occupants. He wouldn't even say what percentage of the space has been leased.

"It's just such a sensitive time right now," Gillespie said. "I'm literally at the goal line right now and want to keep the information to ourselves."

One thing he does say is the project is proceeding. According to Gillespie, operators of Baskin-Robbins and some of the other tenants on the south end of the site have been given notices to vacate at the end of October. Demolition will begin in November.

"In a couple of months I'll be digging a hole in the ground," he said. "A big hoarding (that, according our Funk & Wagnalls, is British for a temporary wooden fence around an under-construction building) will go up with the details" of financing and tenants.

A new chapter of a commercial real estate group, the International Development Research Council, has formed in the Puget Sound region.

The IDRC is made up of real estate managers for large companies such as Microsoft, Boeing, Paccar, as well as real estate service providers.

So far, the Seattle group has had two meetings with about 40 folks attending each, according to chapter Chairperson Carol Sanders, director of real estate services for Van Waters & Rogers Inc., a chemical distribution company based in Kirkland. She said the chapter provides not only networking opportunities but, more importantly, educational programs.

The IDRC will hold its World Congress in May 2001 in Seattle. Gordon Buchan, the Seattle-area chapter's vice chairman and executive vice president of Kidder Mathews & Segner, said 2,500 people typically attend such events.

It's great to have all these real estate decision makers coming into town, he said. You walk around the room and see real estate providers for Xerox, Ford, Sun Microsystems. Every time you turn around you see real estate people involved in all aspects and lots of service providers.

The IDRC World Congress is just one of the large real estate events coming to town. The National Association of Industrial and Office Properties will hold its national convention in Seattle in October, and the following month the Society of Office and Industrial Realtors will be in town for its Fall Professional Conference.

The first tenant for the new Exchange Building -- the elegant art deco structure that is being renovated -- has been signed. Avandel Inc., a provider of risk and medical management solutions for catastrophic health care events, will be moving from Fisher Business Center in Lynnwood into 31,000 square feet on floors 14 and 15.

The 2-year-old company currently occupies 13,000 square feet and needs room to grow. According to Avandel Marketing Manager Sharon Houk, the 55-employee company could find no additional space in Lynnwood. Plus, the company wanted a more central location with a recognizable address for its national headquarters. On that account, Lynnwood can't compete.

Lisa Stewart of the Trammell Crow Co., is marketing space in the 22-story, Exchange Building for the owner, Chicago-based Walton Street Capital, which is investing more than $5 million in the renovation at 821 Second Ave. She said other leases are pending and that the ultimate tenant makeup depends on how much space King County takes. King County Metro occupied much of the building but moved earlier this year to offices in the new King Street Center.

Avandel's broker, Kirk Johnson of Grubb & Ellis, said his client may take more space in the Exchange Building, which noted Seattle architect John Graham Sr. designed. It was built to house Seattle's produce, grain and market exchanges, but the developers' timing was lousy. The grand opening was set for just before the stock market crash of 1929, and the original tenant never occupied the space. Eventually, the building became the main office of the telephone company, which housed operators there. Instead of stocks, telephone calls were switched, so the Exchange Building name stuck.



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