Owners: Douglas Howe, James O’Hanlon and Shawn Parry
Three years ago the principals at Touchstone decided to be one of the major developers of research-and-development space in Seattle.
In 2004, that goal will take shape with the opening of the nearly $100 million Ninth & Stewart Life Sciences Building. The 11-story, 215,000-square-foot development is about two-thirds leased to Corixa. This is just the beginning.
Touchstone’s Douglas Howe says his company is contemplating four more biotech research-and-development projects totaling more than 800,000 square feet. Construction would be phased over five years with one starting construction in 2004. He would not elaborate.
“(In addition), we are contemplating a major urban infill retail center,” Howe said.
Of the five projects, two would be at Denny Triangle locations and three would go in other locations Howe said he could not disclose.
Also on tap for Touchstone in 2004 is construction of two more traditional projects: a 150-room Courtyard by Marriott near the intersection of 124th Street and Interstate 405 in Kirkland; and Westlake Plaza, a $90 million, 330,000-square-foot commercial office at Eighth and Westlake avenues, just north of the new federal courthouse that’s under construction. Lease Crutcher Lewis is the contractor on both projects.
All this doesn’t mean Howe thinks the office market is back; rather, he thinks it’s about to come back and he’s preparing.
“It seems to me that no matter how hard we try to fight it, no matter how hard we try to deny it, no matter how hard we try to ignore it, it’s still a 10-year cycle,” he said.
For four years, the market is a real bummer. The other six-year period tends to be a real hummer. Howe pinpoints the current Seattle market in the middle of the slow six years.
The good news is climbing back won’t take as long as it did in the early 1990s. The last “up” period 15 or so years ago was driven by the money supply. “You could get any project financed in the late ‘80s,” Howe said.
When the market tanked in 2000, it was brought down by what turned out to be false demand from dot-com companies. “They took twice as much space as they needed,” said Howe.
The difference between these cycles is the low interest rates of the latter one. It has cushioned the blow. “So we start the next cycle from a stronger base,” Howe said.
To get through the ups and downs, Touchstone has diversified with hotels and some retail, and Howe said the retail sector offers some promise in the coming years. “I’d say there’s strong demand for well-sited projects, particularly urban,” he said. “I see that as a strong opportunity today.
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