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December 10, 1999

Real Estate Buzz

Crews will begin building another 750,000 square feet of office space in downtown Seattle if it's true that Hines has landed a big tenant for Madison Financial Center.

The work would boost the record amount of office space under construction in the Puget Sound region to a whopping 8 million or so square feet -- depending on whose statistics one cites. And it would bolster the region's status as the West Coast's most active construction market. A recent Colliers International report stated that the amount of space going up here was double the amount in second-place Phoenix.

At 38 stories, Madison Financial Center also would be the biggest building to go up in Seattle since the 62-story, 900,000-square-foot Key Tower rose from the ground 10 years ago, according to Cushman & Wakefield's research department.

Currently, the speculation is wild. (You know how these fish stories are.) Some brokers say that Hines, which is developing Madison Financial Center at the southwest corner of Madison Street and Fourth Avenue with Martin Smith Inc., has reeled in a 400,000-foot whopper. Poppycock, say other brokers who put the figure at 200,000.

The rumored tenant is IDX Systems Corp., one of the largest health care information systems companies in the country. IDX now occupies about 200,000 square feet in the 1001 Fourth Avenue Plaza. Don Fridley, IDX's facilities manager, said the company is growing and looking for space but no lease has been signed with anyone.

Hines' Rob Hollister couldn't say much; the company comments on deals only after they're signed. However, he said there might be one or more major transactions to discuss in the next month or two.

Hines has made no secret that construction will not commence until 25 percent of the space is preleased. I expect we will be well beyond that hurdle before much time in 2000 has passed, added Hollister.

On the other side of the lagoon in Bellevue, it sounds as though drugstore.com and Westbank Projects Corp., are getting closer to consummating a deal that would kick off construction of Westbank's sizeable Lincoln Square, a mixed-use project that is just east of Bellevue Square and includes 500,000 square feet of office.

Over the months, drugstore.com has become less shy about its intentions. Initially, company officials said they were merely exploring space options. Now it sounds as though Lincoln Square will be the company's home.

The latest from Debby Fry Wilson, drugstore.com spokeswoman: As far as I know there is nothing signed yet. We are in discussions to utilize that space. We are negotiating. It is a good possibility that drugstrore.com will ultimately move its headquarters there, but there is nothing signed as of yet.

Contrary to a report from an outside-the-area news service, AMB Property Corp., is not building Bay Area-based online grocer Webvan a new 350,000-square-foot distribution center in Kent.

As anyone who has been paying attention knows, AMB bought from Benaroya Capital Co., a 654,000-square-foot warehouse that had been built for Eagle Hardware. Chris Schadlich, director of corporate communications for AMB, confirms Webvan will be taking 350,000 square feet in the facility.

More about groceries going mobile: Several months ago it seemed that every commercial real estate pro from Seattle to San Diego was hot to help Kirkland-based Homegrocer.com with its huge national rollout. Our sources say that the real estate and construction division of Ernst & Young, one of the world's biggest accounting firms, won the contract. Officials at Homegrocer.com., which serves Seattle, Portland and Orange County., Calif., and plans to expand into 20 markets next year, were unavailable for comment.

Bureaucrats at City Hall, take note: BOMA members in Seattle learned last week that there's more than one way to outfox an anarchist. As hooligans (we in the newspaper business get extra points each time we use the word hooligan) took to the barricades last week during the debacle that was the World Trade Organization meeting, members of the Building Owners and Managers Association took to their computers.

BOMA prepared by hosting a WTO planning seminar and creating a private listserve. When the violence broke out, BOMA members sprang into action to alert each other and recommend ways to head off even more catastrophes.

FYI: Stewart and Sixth is being blocked by protesters rolling retail tenants' Dumpsters into the street, read one network notice on Terrible Tuesday. Dumpsters also being moved at 520 Pike Tower.., warned another.

BOMA International and Alan Kajikawa of BOMA/Alaska, whose suggestion it was to form the temporary listserve, provided a tremendous service to BOMA/Seattle members by setting up the planning seminar and establishing the system to exchange just-in-time information, said BOMA/Seattle Executive Vice President Rod Kauffman.

We were able to tell our members early to watch out for a stolen propane truck (it apparently never surfaced in Seattle) and tell them how to get clearance for their staffs to possess and use gas masks while working outside when it was against the law to have one, Kauffman added.



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