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October 15, 1999

Real Estate Buzz

The rush of office tenants to the Seattle waterfront continues.

The latest to join the stampede, according to the rumor mill, is Mithun Partners. The Seattle architecture firm, which has taken on such high-profile projects at the new REI flagship store and the renovations of the historic Smith Tower and the Exchange Building, is said to be heading to Pier 56.

The Mithun at Pier 56 scuttlebutt has been on the streets since at least April when the architects notified their current landlord, the Vance Corp., that they did not plan to renew their lease next year. Currently, Mithun occupies most of the triangular Times Square Building at Stewart Street and Olive Way in Seattle. Now the talk is heating up again.

That's because Martin Smith Development Co. is ramping up for a $9.2-million renovation of its Pier 56. The 65,000-square-foot remodel includes retail on the first floor and 35,000 square feet of office on the second. Smith officials have said publicly that they are talking to a prospective office tenant but they won't name names, and Mithun officials say it's premature to talk about the alleged deal.

Should the rumor turn out to be true (and there's every indication that it will, our sources say) Mithun will be the latest in a herd of creative companies taking space in unconventional spots on or near the waterfront. Among them are RealNetworks at the former Seattle Trade and Technology Center, Go2Net at Pier 70 and Mahlum Architects in the Polson Building.

Oh, like this is some big secret: Urban Outfitters taking space in the old Nordstrom, that is.

Pine Street Development, which is renovating the old Nordy store, has kept a tight rein on announcements about who is taking space in its high-profile project. So far, three tenants - jeweler Bailey, Banks & Biddle, crafts peddler Twist and women's apparel retailer Coldwater Creek - have been announced. Pine Street officials have said the other three retail spaces have been taken and that the tenant announcements will be forthcoming.

Urban Outfitters, which according to its Web site sells "subculture" style clothes, beat Pine Street to the punch when it posted a help-wanted sign outside its new spot at the old Nordstrom. D'oh!

A manager at the Urban Outfitters store on Broadway confirms the store will open another Seattle outlet at the site of the help-wanted sign. The opening date, he added, is up in the air.

The 275,000-square-foot Museum Plaza Building at Second Avenue and Union Street in Seattle will have a date with a wrecking ball ... someday.

The office building's next-door neighbor, the Seattle Art Museum, owns it and plans to get bigger. SAM's Board of Trustees voted Tuesday to pursue expansion on the Museum Plaza block in the next two decades. This is based on advice from a museum consulting firm, M. Goodwin Associates Inc. of Los Angeles, which the trustees hired last spring to help it plan SAM's long-range growth.

The trustees also voted to retain ownership of the Helipark Garage at First Avenue and Union Street and use it as rental property.

Eyebrows on the Eastside were raised recently when JDL Enterprises LLC paid $3.4 million for the 9,600-square-foot former headquarters of Royal Oak Inc, in Kirkland. That set a regionwide per-square-foot price record of $354. (The previous record was $269 a foot, paid by Equity Office Properties Trust two years ago for the Northwest's tallest building, the 76-story Bank of America Tower.)

Before everyone starts fluttering over the price again, hold on. The price "sounds like a lot, but look at it on a redevelopment basis," said Matt Frey, a member of the JDL LLC. "We intend to redevelop the property. A-plus-plus office space is what we've got planned."

In real estate, of course, location is everything, and the adage remains true in this instance. The property is across the street from the Eastside's shiniest office trophy, Carillon Point, which has been attracting venture capitalist companies as tenants. They're flocking to the point to serve the Eastside's booming technology sector.

JDL officials plan to offer a similar sort of venture capital company its own premier address with the new development. The developer is looking at a two-floor building. Zoning allows for up to 37,000 square feet but don't expect JDL to go that big. "We don't want to suck up the whole entire lot with a huge footprint," Frey said.

First, though, JDL will lease out the building for two or three years.

John Luger is a major shareholder in JDL. He recently sold Database, a data security business. His son-in-law, Frey, said a small portion of the proceeds went to buy the building from Royal Oak.

Interestingly, Royal Oak is the mining company that went bankrupt earlier this year.

Brokers Jeff Watson and Jim Kinnerk of the Broderick Group represented Royal Oak in the sale, and Dick Pelascini of Windermere represented Royal Oak.



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