CB Richard Ellis

Specialty: Commercial real estate services
Principals: Art Wahl, Jim Bowles, Steve Penn
Year founded: 1903
Largest recent deal: $38 million sale of the Eddie Bauer headquarters to Microsoft

Bowles

In 2003, CB Richard Ellis Senior Managing Director Jim Bowles predicted 2004 would be a good year, though not as active as 2003.

“That was a pretty good analysis,” Bowles said recently, after his words were read back to him. “2004 was slightly less active that 2003, but still on the whole a reasonably good year, particularly in the investment arena.”

Los Angeles-based CB is the largest commercial real estate services company in the country, based on total gross volume, Bowles said.

Major local investment sales in 2004 included a Marysville Safeway plaza ($21 million), Marysville Town Center ($19 million) and the Eddie Bauer headquarters ($38 million).

CB’s top retail leases included American Eagle Outfitter’s placement in the former FAO Schwarz space downtown, plus leases for Pure Fitness and Krispy Kreme.

Office leases included architect CollinsWoerman (25,000 square feet), law firm Christensen O’Connor (46,000 square feet) and State Farm Insurance (35,000 square feet).

The top industrial lease was Norvanco in Kent, at 500,000 square feet.

Low interest rates have continued to spur real estate purchases, Bowles said.

“Major investment institutions continue to be flush with money, and consequently that’s driving the investment, particularly for larger quality properties.”

Newer, Class A spaces such as the IDX Tower could command record purchase prices, he said.

“Partly that’s because it’s a great building with outstanding tenants, but also that’s partly because the market is aggressively pursuing large top-quality properties.”

Owners have been encouraged to sell their properties because lower interest rates tend to drive up purchase prices.

But the office market isn’t likely to take off until the region rebuilds its employment base.

“It’s clear in the office market, specifically, that demand is driven by job growth,” Bowles said. “What we haven’t seen yet is much in the way of new job growth. So if you don’t have people that need space, you don’t (need) people that build buildings.”

Much of the new construction is concentrated between south King County and Olympia, where heavy traffic at the ports of Seattle and Tacoma has driven industrial growth.

Big new warehouses don’t generate many jobs, “but they gobble up a lot of real estate,” Bowles said. “Property that’s been available for years in that region is becoming much more interesting to developers.”

On the retail front, construction has remained limited, but vacancies have been low.

“We’re seeing a shift in retail development,” Bowles said.

“In addition to big-box developments like Costco, we’re also seeing more interest in the development of lifestyle centers like University Village and Alderwood Mall. We expect those types of developments to continue, where the retail is as much a place to spend time as just buy things.”

Multifamily rental properties have been sluggish, largely due to low interest rates.

“As long as people can buy a house at a price point where the debt service is similar to apartment rental rates, they will generally try to buy a house,” Bowles said.

Bowles said no one service line predominates at CB. “We’re pretty balanced and we try to keep it that way,” he said.