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January 7, 2000

Real Estate Buzz

With the way things have been going in Bellevue, don't be surprised if yet another tower crane pops out of the ground soon. The next big crane might sprout at Northeast Fourth Street and 108th Avenue Northeast -- site of Eugene Horbach's proposed Bellevue Technology Tower, a 20-story structure that has tech types salivating.

Three other buildings -- Three Bellevue Center, Civica Office Commons and One Twelfth @ Twelfth -- already are under construction. A fourth project, Lincoln Square, should be underway soon now that drugstore.com has signed up for 180,000 square feet of space. Together these add up to 1.8 million square feet of new office space in a market where the existing inventory is 4 million feet. At 330,000 square feet, the Tech Tower would push the amount of new space over 2 million feet.

If downtown Bellevue were the Starship Enterprise, no doubt Lt. Montgomery Scott would be in a panic, blathering on about whether the craft could handle the extra load. ``She can't take it, Jim!'' he would cry. Capt. Kirk would turn to the latest vacancy rate numbers to assuage his engineer's jitters.

On Monday, Cushman & Wakefield and CB Richard Ellis were first out with their fourth quarter numbers. According to Cushman & Wakefield, the vacancy rate climbed to 3.8 percent, up slightly more than a point from the third quarter. And CB Richard Ellis reported the rate dropped ever so slightly to 2.53 percent. Across the Puget Sound region, the market generated a whopping 2.2 million square feet of tenant growth, the most ever recorded by CB Richard Ellis. So quit your crying, Scotty.

Brian Hatcher, the Kidder Mathews & Segner broker who is marketing the space for E&H, reports that in the last six weeks he and his colleagues have made a handful of presentations to major users. While none said yes to space, none said no. One presentation was to a high-tech company, and Hatcher said the group was most impressed by the state-of-the-art communications gizmos.

Big news at CB Richard Ellis: Jim Epes has left the company to join Getty Images as a research analyst in business development. Going from a real estate brokerage to an Internet company is quite a leap, but Epes notes his new post will still put to use his notable research and analysis skills. Seattle-based Getty, one of the largest providers of visuals to outlets of media both old and new, might also want to put his writing skills to work, too.

Epes elevated real estate reporting to a new level in Seattle when he wrote for Brand X, our pet name for the paper everyone else knows as the Puget Sound Business Journal. About two years ago he joined CB Richard Ellis as director of information services and soon the company's quarterly reports were practically poetic. That's quite a feat given the prosaic nature of real estate.

It was the lure of the Net that drew Epes to Getty. On Tuesday, Getty announced it has signed partnership agreements with seven creative companies, including its Fremont neighbor, Adobe, to enhance content on its gettyone.com site.

``The Internet is an exciting place to be and Getty has done real well so far. I just thought it was time for a move,'' Epes said.

You don't have to look far for proof that high-tech companies are leading the real estate surge in the Puget Sound region. Consider Norris Beggs & Simpson's latest issue of Dealmaker, which lists the biggest leases of 1999. The Redmond enterprise that tells its employees they work for The Most Important Company in the History of World not only heads the office list at No. 1 but fills spots two and three as well. And if that weren't noteworthy enough, Microsoft's lease of 610,000 square feet at Lakeridge Square was bigger than even the largest industrial lease of the year. Oh, the humanity.

For the record: Microsoft's lease at Lakeridge Square in Redmond was followed by Mr. Gates' decision to also take 390,000 feet at Sammamish Park Place in Issaquah and 271,000 square feet at Millennium Corporate Park in Redmond.

On the industrial side, online grocer Webvan.com's taking of 400,000 square feet in the Eagle Distribution Center in Kent was No. 1. Pacific Northwest Inc.'s lease of 283,325 feet from Office Depot in Kent was second. And third was the 239,000 square feet taken by A&M Warehouses at Emerald Corporate Park in Auburn.

As for acquisitions, EMARR Investment Management paid Bentall $130.3 million for partial owner of the US Bank Centre in Seattle to take top honors. The $52.6 million that Spieker Properties paid Principal for Lincoln Executive Center in Bellevue was second. Third place belongs to Clarion Partners, which paid Trammell Crow Residential $47.7 million for Avignon Apartments in Redmond. In case you missed it in the DJC a couple weeks ago, Avignon was named for the French city that was once the summer home of the popes.

Here's a deal carnivores can sink their teeth into: Another purveyor of beef, Fleming's Prime Steakhouse, is coming to downtown Seattle. Tina Pappas and Curt Thornburg, brokers at Colliers International, have inked a deal that has Fleming's taking 8,500 square feet in the Expeditors Building at 1001 Third Ave., according to a list of leases from Colliers. (This deal apparently is for long-vacant space on the ground floor.) Fleming's joins Morton's of Chicago, which recently opened its 50th restaurant downtown.

This penchant for red meat seems strange in a fishing village with a reputation as a place that vegetarians favor. Who'd of thought Seattle would ever become such a cow town?



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