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January 21, 2000

Real Estate Buzz

Anyone looking for a trend in the Puget Sound region's commercial real estate industry should peer into the closets of area developers. Or if you're not that brazen, just check out what they're wearing.

In the past two weeks, we've called on some of the region's most active development companies. This necessitated the shirt-and-tie routine, which prompts some stress because we economically disadvantaged newspaper types are not exactly paragons of formal fashion. Turns out the trauma was totally unwarranted.

At Opus Northwest, the outfit of the day was business casual as evidenced by Vice President Tom Parsons' smart black turtleneck with coordinated gray slacks. The next hour found us in the Bellevue office of Bentall where U.S. division Chief Operating Officer Gary Carpenter was similarly attired. Developer Martin Selig? He was found without a tie recently, as was Wally Costello, a senior vice president of Quadrant who was hard at work in a comfortable sweater.

Further evidence of the trend turned up during a visit to the Seattle office of Wright Runstad & Co., one of the area's most established development companies. True to the pattern, Chairman and CEO Jon Runstad was dressed in a nice blue dress shirt, sans cravat.

What does this mean? Two things: Even the starchy world of commercial real estate development has begun to come around to the high-tech casual mode Seattle is known for, and it's a lousy time to be a haberdasher in the Pacific Northwest.

The next old-turned-new address for high-tech companies will be a warehouse in Pioneer Square, according to the rumor mill.

The buzz is that Martin Smith Real Estate is about to acquire the six-story Provident Building, located in the 500 block of First Avenue South. Martin Smith officials declined to comment.

But our sources say the building, which now houses a furniture manufacturer, will join the parade of conversions from industrial to high-tech office space. Similar Pioneer Square projects, such as the Polson and the 2200 buildings, have been wildly popular with creative companies that snatched up the space faster than an aardvark at work in an ant farm.

The Provident Building already is proving as popular, with tech companies reportedly clamoring for the chance to be tenants.

In case you missed it: The Wall Street Journal on Wednesday reported that something finally will be done to the forlorn Second & Pike Building in Seattle.

The report, which called the property one of downtown's "most intractable eyesores," states that building owner Richard Nimmer believes the neighborhood's comeback is for real so he is deciding how to redevelop the 96-year-old brick building that is mostly vacant except for the anti-HIV needle-exchange program housed on the first floor.

Nimmer has hired Carletti Architects of Mount Vernon to assist with the project. Among the options for the seven-story building are a boutique hotel, housing and retail or office. Planning has just begun.

"We've been through the building but that's as far as we've gone," said Peter Carletti, formerly of Mithun Partners.

One thing is fairly certain: the property likely will not be put on the market. "I know they don't want to sell," Carletti said. "They've owned it for so long that if it gets redeveloped, they want to be the ones who do it."

The Raytheon Building in Mukilteo's Harbour Pointe neighborhood is back on the market. An investor had the 356,000-square-foot building under contract but the deal didn't go through.

"In the end they felt they just weren't comfortable enough with the North End market to move ahead," said Gregg Riva, the Colliers International broker who is handling the sale with colleague Derek Heed.

Raytheon plans to move out of the structure this spring. That will leave one tenant, a 50,000-foot user with a lease that runs through 2001 and includes an option to extend. And an unnamed tenant is considering a 200,000-square-foot lease, according to Riva.

Even though Boeing's downturn has hit the Everett-area market, the region's overall low record vacancy rates bodes well for the seller. The building is on a wooded lot that overlooks Puget Sound, and the facility offers huge floor plates of up to 80,000 square feet, rare for the North End market.

If you're in the market for property on the French Riviera, have we got a Web site for you: www.buyriviera.com.

Here's how Ursula Rochas, director of sales for Nice, France-based Buyriviera, explains the program: "The conventional real estate agent is mainly focusing on sellers. We do exactly the opposite." The company identifies buyers through the Net and matches their wants and expectations to properties. "The future buyer does not have anymore to spend days visiting hundreds of agencies or to surf on Web sites listing thousands of different pieces of real estate."

Well, thank heavens for that. Imagine the horrible headache one must suffer while shopping for Riviera property.

Stereotypically speaking, development is still a man's world, but of course not everyone in the business has the Y chromosome. Consider the case of Bellevue developer Shannon Underwood.

As noted in this week's People and Companies column to the left, the National Association of Industrial and Office Properties recently sent out notice that a "Mr." M. Shannon Underwood has been appointed to the Industrial Development II National Forum. NAIOP developed various forums to improve networking for members.

All this is fine except Shannon Underwood is very much a Ms., not a mister, as her lovely children and wonderful husband, David Gartland can attest.



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