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“Nabbefeld”
Joe Nabbefeld
Real Estate Editor

November 2, 2000

Real Estate Buzz: Law firm eyes Tech Tower's top floors

This week's buzz on the streets of Bellevue has the law firm Wilson Sonsini Goodrich likely leasing the top four floors of developer Eugene Horbach's downtown Bellevue Technology Tower.

Wilson Sonsini wouldn't play a launching role for the 20-story Tech Tower. Horbach, represented by Kidder Mathews & Signer brokers Brian Hatcher and Jeff Chaney, already signed several tenants to put financing in place. Construction started earlier this fall.

But if Wilson Sonsini signs that takes a strong prospect out of the reach of other developers still searching for that first big tenant to pull their skyscraper from planning into construction.

The top four floors equal about 70,000 square feet. Hatcher didn't return calls to comment.

Wilson Sonsini is based in the San Francisco Bay area and its Eastside office is now in Carillon Point on the Kirkland waterfront.

The 357,000-square-foot Tech Tower is one of half a dozen new office skyscraper proposals competing to get built in downtown Bellevue.

Developer Bentall US LLC has another of this wave under construction -- The Summit -- but without a signed tenant yet. Bentall executive Lisa Rowe said a couple of tenants are close to signing but wouldn't say more about them.

Bentall gave the job of finding tenants to brokers headed by Bill Pollard at Pacific Real Estate Partners.

The Summit will consist of three mid-rise buildings in a campus-like configuration totaling more than 800,000 square feet.

The third structure under construction in the latest Bellevue wave, Lincoln Square, went into construction fortified with a large signed tenant, but that tenant, Drugstore.com, recently laid off some staff.

Naturally, buzzers wonder if the layoffs and ongoing dot-com stock correction mean Drugstore's already reduced 142,000-square-foot lease will shrink more. So far there's no sign of shrinkage.

Meanwhile, despite the dot-com capital pull-back, Bellevue watchers continue waiting to see if InfoSpace will take more space in downtown Bellevue in the aftermath of its merger with downtown Seattle-based Go2Net. InfoSpace occupies several floors in the freshly built Key Center in downtown Bellevue.


WiredZone signs first tenant

A fast-growing local company specializing in using computers to unlock the human DNA code leased 85,000 square feet to become the first tenant in the former Raytheon Building at Harbour Pointe in Mukilteo.

CombiMatrix Corp. leased 85,000 square feet in what the building's new owner, Dallas-based WiredZone Holdings, now calls the Harbour Pointe Tech Center.

WiredZone bought the 350,000-square-foot building from Raytheon Corp. in August for $23 million. The purchase included 31 acres, on part of which WiredZone figures it could some day build another 120,000 square feet of buildings.

Raytheon built submarine parts in the architecturally distinct, arc-shaped building, but Raytheon moved that operation to Hood Canal. Torpedo-guidance system maker Synrad occupies 50,000 square feet in the building until next summer.

WiredZone said it would convert the building into a combination of leasable high-tech offices and a telecom hotel for housing services, switches and other equipment. WiredZone expects to divide the space into 180,000 square feet of tech offices and 170,000 square feet of telecom hotel space.

CombiMatrix, formed in 1995 and headed by President Patrick Quarles, works out of about 7,500 square feet of subleased space in the Trailside Building in the Snoqualmie Ridge business park in Snoqualmie.

Publicly traded Acacia Research Corp., which develops and runs tech companies, owns a majority of CombiMatrix, the headquarters of which will move to Harbour Pointe.

CombiMatrix controls a patented design for an electronically active chip surface that it claims is powerful enough to advance studies and applications of DNA research.

"Our system's Internet-enabled components, standard processing and quick turn-around will promote the widespread use of custom-designed microarrays by researchers worldwide," state's the firm's web site.

Colliers International brokers Gregg Riva and David Rothrock represented WiredZone. John Cox of Kidder Mathews & Segner represented CombiMatrix.

WiredZone looks close to signing a telecom tenant to about 90,000 square feet at Harbour Pointe and an office user to about 30,000 square feet, Rothrock said.


Kimco buys Pavilion Center

Kimco Realty of New York bought the Pavilion Center, a 200,000-square-foot Federal Way shopping center, from Center Trust of California for $30.4 million, King County property records show.

The price roughly equals what Center Trust paid developer Peter Jouflas and his partners for Pavilion Center more than two years ago.

Center Trust Senior Vice President Joe Paggi said Center Trust sold because Center Trust's strategy is to improve properties and then sell them to capture added value that Center Trust created.

Paggi said Center Trust increased Pavilion Center's occupancy from 80 to 100 percent, mainly by bringing in Joanne's Etc., which leased 45,000 square feet.

Jouflas had remodeled Pavilion Center shortly before he sold to Center Trust, then operating as Alexander Haagen Properties Inc.

Jouflas said he hadn't followed the center since then and thus didn't know that Center Trust had sold. He said it would surprise him if Center Trust hadn't made anything on the property. He joked that if he had known the property was for sale at $30.4 million, he might have taken a run at it.

Kimco is a large, New York-based retail property investor.

Center Trust owns another eight strip shopping centers in the Puget Sound area and likes the area well enough to want to buy more, Paggi said. Center Trust's largest activity among its eight area properties involves enlarging Safeway's space in the Fairwood Center in Renton, Paggi said.


TeraBeam signs at Willows 124

The young telecommunications company TeraBeam Networks leased 57,000 square feet in GDA Realty's Willows 124 Building in Redmond.

TeraBeam will move from other space it leases along Willows Road.

Former AT&T Wireless executive Dan Hesse became head of TeraBeam last summer. The firm plans to speed up "the final mile" of fiber optic cables by transmitting from the cable to individual buildings via laser beams.

TeraBeam signed for 39,000 square feet of offices and 18,000 square feet of flex space in Willows 124.

Colliers brokers David Rothrock and Mike Schreck put the lease together.

Joe Nabbefeld can be reached at (206) 219-6518 or by e-mail at joe@djc.com.



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