homeWelcome, sign in or click here to subscribe.login
     


 

 

Real Estate


print  email to a friend  reprints add to mydjc  

March 10, 2000

Real Estate Buzz

One of the McCaw brothers has a rumored interest in Amazon.com, at least as far as commercial real estate at Union Station is concerned.

Opus Northwest, which is developing the three-building Opus Center @ Union Station is said to have found a buyer for the 570,000-square-foot complex. According to sources, it is one of the McCaws.

On the surface, it makes plenty of sense. Last year, a limited liability corporation called Willows Redmond bought for $55.59 million four of five buildings that Opus developed at Willows Commerce Park in Redmond. Several Eastside commercial real estate observers said one of the McCaws formed the LLC.

At the time, the names of the LLC's members were not on file with either the Washington Secretary of State's Office or the state Department of Licensing. Now representatives of the agencies say that telecommunications pioneer Keith McCaw's MIG Corp., is listed as the LLC's member/manager.

McCaw was not at his office yesterday, and Opus officials were unavailable for comment.

In September, when Opus Northwest Vice PresidentTom Parsons confirmed that the 570,000-square-foot Opus Center @ Union Station was for sale, he said officials at his company were talking to institutional buyers and "other qualified large investors."

And the Amazon.com connection? Everyone knows, but Opus and the online retailer have declined to confirm, that Amazon is taking 350,000 square feet of Opus Center @ Union Station. This has spurred real estate experts to wonder just how Opus Northwest will be able to sell a development that the majority of which will be occupied by a company that has yet to turn a profit.

Earlier this year, Parsons said any deal goes back to the strength of the underlying real estate as well as the credit worthiness of the tenants -- whoever they might be. He added this makes Opus comfortable as the developer of the centrally located project that will be at the crossroads of Sound Transit.

Evidently one of the McCaws is as well, at least if the rumor pans out.

People sure are touchy when it comes to money. Consider the reaction to the recently released CB Richard Ellis Real Estate Demand Index, which measures the strength of a particular market. The fourth quarter Eastside REDI dropped -- but only by 4 measly points -- to 1,404. That's a decrease of a whopping .0028 percent.

We didn't mean to create a tempest in a teapot but did by attaching the headline "Eastside office market shows signs of cooling" to the story in Wednesday's edition.

Based on reader response, you'd think we were being melodramatic. Yep, that's the DJC -- ever the yellow rag.

For sensitive readers let us reiterate some things in the story. It quotedAnn Chamberlin, the Seattle-area senior managing director for CB Richard Ellis, saying: "It is important to note that the market is not declining, it is just slowing down." And the story stated that office rents continued climbing last year; they just didn't climb as fast as inflation so the index dropped accordingly.

Yesterday Chamberlin emphasized that the REDI is but a snapshot of one quarter. At the end of last year there was a dearth of new office space that came on line. It's anticipated that when some of the new upscale projects open this year, the REDI curve will swing upward.

So, investors, climb off the ledge and close the window. And, please, next time read beyond our sensational headlines.

Remember the days where the only $40-plus per square foot rents came in for highrise office towers. My how things have changed.

The latest example comes not from the Seattle central business district but from the Lake Union neighborhood. Baugh Construction last month finished the shell of Foss Redevelopment's Fairview Office Building, 1151 Fairview Ave. E. The 18,500-square-foot building, which Mithun Partners designed, has generated at least four real letters of intent and all of them north of $40 a foot, including expenses.

"We haven't consummated a lease with anyone yet," said Chris Moe, the Kidder Mathews & Segner broker who is marketing the space with colleague Larry Blackett. They are, however, close to a deal with a new venture capital company that is locally owned.

Moe explained that while cost is an important factor, it is not as paramount as environment. All of the companies that bid on the space want a unique locale -- one that fits their cultures and offers amenities such as sailing, seaplanes and Friday afternoon margaritas on the deck. This building is competing with and winning against the highrise portions of Two Union and the Bank of America and Washington Mutual towers, according to Moe.

"The strangest thing to me is to see the reaction" of the bidders, Moe continued. "They're not disappointed they're paying that much rent. They feel lucky they can get it and put up tremendous letters of credit to secure it. At least they have a home. The psychology of the tenant is much different than it was just a year ago."



Previous columns:



Email or user name:
Password:
 
Forgot password? Click here.