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September 24, 1999

Real Estate Buzz

By MARC STILES
Journal Real Estate editor

Developer Ian Gillespie won't name the anchor office tenant at his $300 million Lincoln Square development in downtown Bellevue and drugstore.com officials wouldn't say if they're the ones. But brokers on the street say that's the case.

Lincoln Square
Last week, Gillespie said that Lincoln Square, the big mixed-use development just east of Bellevue Square, is a go. He said he has the financing and one big tenant and three small ones for the 27-story office tower. But he named no names. The project also includes a 40-story tower split between a Westin Hotel and private condos.

The following day, talk on the street was that Lincoln Square's big tenant is the 7-month-old drugstore.com. Drugstore officials are being noncommittal, at least publicly.

Says Debby Fry Wilson, a spokeswoman for the Net startup: "We are evaluating our longterm needs. We are a growing company... and our needs are growing accordingly. But we are merely in the evaluation stages and have made no decision in terms of what we are doing with our real estate commitments."

Some brokers wonder why drugstore.com wouldn't go for space in Wright Runstad & Co.'s 22-story Three Bellevue Center, which is under construction. Indications are it's filling up. Says Tim O'Keefe, the Colliers International broker who is marketing the space, "We have more letters of intent than we have space."

The first thing to know about Art Wahl is that he doesn't take himself too seriously, a worthy trait for someone who typically is described by Seattle real estate peers as a legend.

Art Wahl
Wahl
Last month, CB Richard Ellis officials announced that they were merging with the company Wahl leads. At the time, Wahl was out of town on business, and we didn't have a chance to catch up with him until recently. But his story is interesting and his insights noteworthy. Here are both.

The affable Wahl actually got his start on the industrial side but went on to make his mark in retail. His rise began in 1983 when an industrial client asked him to help finalize lease negotiations for a big Seattle warehouse on Fourth Avenue South. A fellow named Jeff Brotman was trying to rent the space for a new company called Costco. Wahl brought the parties together and went on to help Costco expand into the giant it is.

It turns out that Brotman was on the board of another Puget Sound-area upstart company, Starbucks, about the time Howard Schultz came on board. This relationship led to considerably more business Ð and considerably more travel Ð for Wahl and members of his team. Other Wahl clients include the GAP companies, Old Navy, Banana Republic and Ikea.

No wonder Wahl sometimes isn't sure what city he's in when he wakes up. Over the years it's become a bit much and he has on occasion taken some time off and mulled retiring. But he's always come back because he likes the thrill of the deal and all the uncertainties that go with it.

"You can't see around the next corner," he says. "I guess it's just an adventure."

Having worked with some of the nation's top retailers, Wahl knows some of their keys to success. They think one to two years out and hire early so they have their people in place, Wahl explains. Costco and Starbucks did it. So did Seattle's Best Coffee, he says. Now another of his Seattle clients, Sur La Table, is doing so too as it expands.

Sur La Table, Wahl says, "is accelerating now, which is when it gets fun."

Why CB Richard Ellis? Because he long has admired Ann Chamberlin, the senior managing director of the company's Seattle-area offices. Wahl says it took some convincing but Chamberlin persisted. "She's a good saleswoman and kept after me." He adds he always has respected Chamberlin and admired how she has succeeded in the male-dominated commercial real estate industry.

On his expectations on the new venture: "I'm hoping we can put some of our culture into their culture on the retail side." He says he has generally been able to help people understand the business and he wants to continue mentoring.

On e-commerce: "I do not think Internet shopping is going to replace retail shopping. I do not know the answer but I do not think the Internet is going to take us over." To back up his statement, he cites the retail renaissance of such cities as Chicago and Seattle. "You can't tell me downtown Seattle is not electric."

And on life in general: He often wonders about the relevance of his work in the greater scheme of things. He concludes there is not much "social value" in what he does, but he adds: "I'm not hurting anybody."

The Blume Co., had a topping out party Tuesday for its Mercer-Yale Buildings, the 106,500-square-foot office project at 1206 Mercer St. So far no tenants have been signed, but Tim O'Keefe reports it's not because of a lack of interest. In fact, he says a couple of tenants without credit have been turned away. He adds that it has been decided to leave the bottom two floors of the main building for multiple tenants and the top two for larger tenants.

If you think your company's old and established, it's not. Not compared to Metzler North America anyway, which will celebrate its 325th anniversary at a private function in Seattle Thursday.

325 years? In Seattle? Actually, Metzler is the oldest, largest investment bank in Germany. Its first acquisition in the Seattle area was in 1978 when it bought the Lakeridge Business Park, a warehouse/light industrial complex in Redmond. That was one year before Microsoft moved to Bellevue and eight years before the high-tech Goliath moved just up the street from Lakeridge. Now Lakeridge is being turned into a $107 million corporate campus of 610,000 square feet and, as anyone with half brain who follows commercial real estate knows, it is rumored that Microsoft is the tenant.

By the way, the Metzler birthday party is being held in "the jubilant spirit of Oktoberfest," states the invite, which adds: "No lederhosen required."



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