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Real Estate Buzz


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September 3, 1999

Real Estate Buzz

By MARC STILES
Journal Real Estate editor

Among commercial real estate brokers, there's been a big question mark after Dorsey & Whitney, the new big law firm that, in essence, took over where the once venerable Bogle & Gates left off. Folks are wondering where Dorsey & Whitney will establish its permanent office.

The firm has set up shop in about 70,000 square feet in U.S. Bank Centre, 1420 Fifth Ave. But that was rumored to be only a temporary home because Dorsey & Whitney's space there is all chopped up, and offices are connected by different elevator banks. For a busy law firm, that's about as efficient as the bumbling concessionaires at Safeco Field.

Might Dorsey & Whitney move to a different building, perhaps landing space in one of the new towers under construction? Such a question started brokers salivating and panting and chattering about the firm that now stands at 55 lawyers, but plans to expand by as many as twice that number.

Well, stop slobbering, brokers. Dorsey & Whitney is staying put. This is according to partners Robert Kaplan and Jim Tune.

Members of the law firm like the U.S. Bank Centre, Tune said. Kaplan added that Dorsey & Whitney ideally would take up to three contiguous floors of the tower's 44 stories. This would accommodate anticipated growth for the firm. Partners say they will settle for space in the same elevator bank.

In the here and now, Dorsey & Whitney is taking what it can get. "It's not a matter of what our desire is," said Tune. "It's what we can do given the tight market."

According to Shorett Kidder Mathews & Segner's Mid Year Report, the vacancy rate in downtown Seattle is 4.6 percent. That's second lowest in the nation after San Francisco's 4.3 percent. Seattle's rate is, however, up from 3.4 percent last year.

As for taking space in one of the under-construction towers, Dorsey & Whitney's not interested. "We've got immediate needs," Tune said. "If they were available I'm sure we would be talking."

Eastside rumor of the week: Sierra Online has a letter of intent for four floors, or 127,000 square feet, at Sunset Corporate Campus in Bellevue.

Sierra's broker, Pacific Real Estate Partners Principal Troy Gessel, confirmed that his client is in the market for 100,000 to 125,000 square feet. But he declined to comment on the Sunset rumor.

One thing that is not a rumor is that the Dexter Horton Building in downtown Seattle is a designated city landmark, and that portions of it are protected. A recent DJC article inadvertently stated that the building was not designated.

The city of Seattle is preparing to sell the historic structure and has appointed Craig Kinzer & Co. to market it. Molly McCabe of Kinzer says the marketing brochures won't go out until the end of this month but already there has been a lot of interest in the property.

"We've had a lot of people calling to get on the mailing list," she said. "Buildings of this era are so popular that a lot of folks see [the sale] as a slam dunk."

Marcus & Millichap, the real estate investment brokerage company, is getting more aggressive in the Seattle market. The company has expanded its Research Services Division, according to Regional Manager Greg Wendelken, and has a new research analyst, Wyatt Starosta. The beefed-up division allows the company to publish Office Research Report, and last month the second edition was published.

Marcus & Millichap will host an investor symposium at the Hyatt Regency Bellevue on Sept. 23.

Davis Property & Investment, which bills itself as the Kent Valley's newest property development company, has begun construction preparation on Building C of its 50-plus acre master-planned industrial park. Crews from RCI, the general contractor, are removing pre-load and performing site work to prepare for the installation of site utilities later this month. Construction is to be completed in December.



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