Touchstone is starting construction next month on a $70 million bio-medical building in the Denny Triangle area. The major tenant is Corixa. Rendering courtesy of Touchstone

While 2003 might be a write-off for the commercial development sector, there is hope for 2004, according to Douglas Howe, president of Touchstone Corp. “It’s still a tenants’ market in ’03,” he said, “with a gradual shift to a landlords’ market in ’04.”

Howe expects the biotech and life sciences sectors to show strength as the economy turns around and as commercial real estate picks up momentum. Even then, he said that market segment in Seattle is relatively small so the near-term opportunities will be few.

Touchstone’s largest current development is an 11-story biomedical building in Seattle’s Denny Triangle area, at Ninth and Stewart. Construction begins in March on the 215,000-square-foot, $70 million facility, whose major tenant will be biotech company Corixa. About 140,000 square feet is pre-leased.

Howe said Touchstone wants to have a presence in the Denny Triangle area. “Touchstone has made a commitment to the Denny Triangle neighborhood, sensing early on there’s a growth shift north of the downtown central business district for commercial office and biotech,” he said. “We want to focus our energies on this strategy in this area and in Belltown, too.”

He said Denny Triangle has excellent vehicle access to Interstate 5, good public transit with the Convention Center bus station nearby and abundant retail amenities. “There will be some significant development occurring in that neighborhood,” he said.

Howe also sees a glimmer of hope for retail developments. “There are major retail tenants who want to be in various sub-markets,” he said. The caveat is that those tenants may be constrained by a “lack of suitable sites and locations.”