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“Nabbefeld”
Joe Nabbefeld
Real Estate Editor

September 28, 2000

Real Estate Buzz: InterNAP may take huge lease at Wosca

InterNAP Network Services Corp. wins as the hot buzz of the week.

Word is circulating that the fast-growing Internet infrastructure company is negotiating hard for what could be a huge chunk of space at Martin Smith Inc.'s proposed Wosca project southwest of Pioneer Square.

If so, the deal would provide the kind of oomph that moves a project from the talking stage to financing and building.

Martin Smith principal Greg Smith said he'd have to hold back on making any comments about any negotiations until he has a done deal. InterNAP's broker, James Keating of Grubb & Ellis, and an InterNAP spokesman assumed the same posture.

Office real estate watchers couldn't pinpoint how much space Internap might take, other than it appears to exceed 300,000 square feet, possibly by a lot.

InterNAP leases 74,000 square feet as its headquarters in Two Union Square in downtown Seattle and recently signed for some 100,000 square feet nearby in One Convention Place, a new office building under construction by Trammell Crow Co. InterNAP also earlier this year signed for 28,000 square feet of state-of-the-art tech space to house its P-NAP facility in Fisher Plaza next to Seattle Center.

InterNAP provides faster Internet connections through a patented P-NAP routing technology that bypasses clogs on the information superhighway.

Observers speculated that if InterNAP took a huge space at Wosca it might be to consolidate by moving out of the other spaces.

Martin Smith has a ways to go with the seven-acre Wosca site on which the Seattle real estate firm figures it could build up to 1 million-square-feet of housing, offices, retail and parking.

Earlier this year Martin Smith cleared the obstacle of converting the industrial site to office use through adoption of an industrial-area zoning plan that opened the several-block stretch west of the Kingdome to non-industrial redevelopment.

The latest challenge comes from the Seattle Mariners over whether Wosca buildings would block Safeco Field's views of Puget Sound. The site is zoned for at most 65 feet but Martin Smith is looking at the possibility of seeking 85 feet.

The Seattle software company RealNetworks circulated a long-range request months ago for up to 600,000 square feet and was expected to take a hard look at Wosca, since Martin Smith is RealNetworks' landlord on the waterfront north of downtown Seattle.

Folks say now that RealNetworks is most attracted to finding space on downtown's north end. That may explain why Clise Properties recently turned up the heat on plans to develop a major office structure on the full-block Frederick Cadillac site at Bell Street and Fifth Avenue.


Will the Tochtermans sell to Schnitzer?

The latest on the evolution of the Palladium Center super-project proposed as part of Meydenbauer Center's expansion is that Bellevue-based office developer Schnitzer Northwest may end up buying the site from the Tochterman family.

Previous Buzzes quoted Tochterman principal Connie Grant saying some changes are underway to make the proposal financeable. Background sources said those changes involve increasing the office space, possibly doubling it and cutting out the Ritz hotel. Ritz confirmed it's out and street talk placed Schnitzer in the lead to develop the office space.

Schnitzer hasn't commented yet and Grant this week said she's still holding to the plan of not spilling until everything's finalized.

The Tochtermans are long-time Bellevue land owners and have always been considered uninterested in parting with the Palladium site in downtown Bellevue. This week's sources said that position may be softening, but no deal with Schnitzer is final yet.


Washington Shoe buzz

Denizens of the proverbial mean commercial real estate streets also say Samis Land Co. has a promising technology tenant on the line to occupy the Washington Shoe Building in Pioneer Square.

Few of those denizens could name the hooked tenant, but one with acceptable "knowledgeable" credentials identified the fish as Akami Technologies Inc.

Samis leader William Justen said he wouldn't comment before a tenant had signed and none has signed.

Samis earlier this year caught heat for evicting artists who for years had lived and worked in the then-very-funky, historic Shoe Building so Samis could rehab it into some 57,000 square feet of much-higher-rent office space, likely tech office space. The rehab is under way, with Lease Crutcher Lewis as general contractor.

Akami, based in Boston, makes Internet software. The company now operates a Seattle office in about 15,000 square feet in Waterfront Place, north of Pioneer Square.


Paul Allen lands a Whopper

Microsoft billionaire Paul Allen's latest property purchase in South Lake Union comes with mayo, ketchup and mustard.

Allen's Vulcan Northwest paid Restaurants International Inc. $2.9 million for two-thirds of an acre at 1114 Valley St., occupied by a Burger King restaurant, King County property records show.

Allen has steadily bought South Lake Union properties during the past four years with a long-range plan of redeveloping them. The Burger King is at the foot of the H.C. Henry Pier, which Allen bought last year.


Intracorp buys another Belltown site

Intracorp recently paid $7.9 million for two Belltown sites on which the Seattle developer already applied for permits to build a total of 245 residential units, King County property records show.

Intracorp bought the properties at First Avenue and Clay Street from R.D. Merrill Co., the Wright family's Seattle company that builds and operates senior facilities, among other things.

An Intracorp partnership called Western Avenue Development LLC paid R.D. Merrill $4.9 million for two-thirds of an acre at 2716 Western Ave., records show. The price equals $170 per square foot. R.D. Merrill sold under the name First and Clay LLC.

Another Intracorp partnership called First Avenue Development LLC paid the same R.D. Merrill partnership $3 million for a third of an acre at 2721 First Ave., records state. This price equals $225 per square foot.

Last month Intracorp began the city design review process by applying to create a 12-story building on the two sites with 85 residential units on the eastern portion and 160 on the west. The project would provide 250 underground parking spaces and retail along First Avenue.

Numerous other condo and apartment projects are cooking for the blocks surrounding First and Clay, at least three of them by Intracorp along with Avalon Bay Communities and Legacy Partners.


The Burke is now the Imagio/JWT

The growing Seattle PR and advertising firm Imagio/JWT nearly doubled the space it leases in the Burke Building in Pioneer Square.

Imagio/JWT signed a five-year lease for 32,000 square feet in the Martin Smith-controlled historic building.

The deal included changing the building's name to the Imagio/JWT Building.



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