From todays DJC.
http://www.djc.com/news/re/12046456.html
October 24, 2012
Schnitzer gears up for towers in both Seattle and Bellevue
The developer may start building the garages for both before landing an anchor tenant if demand seems strong.
By LYNN PORTER
Journal Staff Reporter
Developer Schnitzer West said an office building it plans at 415 106th Ave. N.E. in downtown Bellevue could be up to 22 stories and 450,000 square feet, and it may start constructing the garage before landing an anchor tenant if demand seems strong.
The firm may also start the garage for a 38-story, 750,000-square-foot office tower called Madison Centre it is developing at Fifth Avenue and Madison Street in downtown Seattle, according to Pam Hirsch, senior investment director and managing partner for Schnitzer.
The Seattle developer has used its own money to start building garages at The Bravern, Civica Office Commons and Advanta Office Commons prior to signing big leases, and that has given it a jump on the market, she said.
“You have to be pretty darn confident that (demand) is going to show up,” she said.
Dan Ivanoff, Schnitzer's managing investment partner, said a tenant is considering leasing all or part of both the Bellevue and Madison Centre projects.
“We have a tenant focused on both buildings now,” he said, but declined to name it.
The team is the same for both projects: NBBJ is the architect, DCI Engineers is the structural engineer and Sellen Construction is providing pre-construction services.
Based on the permitting time line, Schnitzer could start Madison Centre in the second quarter of next year and start the Bellevue project late that year, but has not set construction dates, Hirsch said.
The Bellevue office building will cost more than $100 million. Hirsch said it could be 16 to 22 stories and have 360,000 to 450,000 square feet. It will have 10,000 to 15,000 square feet of retail in a podium base and three underground parking stalls per 1,000 square feet. The retail may include a restaurant.
Schnitzer said the site near Bellevue Square and Downtown Park is under contract. A Bank of America branch now occupies it.
Schnitzer is one of a number of developers who have proposed office projects in downtown Bellevue.
The others include Bentall Capital (which started and then capped the parking garage for its building after the market tanked in the recession), and Beacon Capital Partners and Kemper Development Co.
Ivanoff said he thinks none of them will build without a prelease, and Beacon would also require a joint venture.
Ivanoff said the office building at 415 106th Ave. N.E. will be similar to the Civica Office Commons, also in downtown Bellevue. Civica was Schnitzer's most profitable project per square foot.
Ivanoff said the site is well located and the building will be even better than Civica, with some “incredible public space” and updated technology so tenants can do more work virtually, providing “a more robust work experience and life experience.”
Schnitzer will not joint venture on the project, like it did with The Bravern mixed-use complex it built in Bellevue. Hirsch said the size of the newest project is more manageable, and so “we don't need to leverage even further.”
The firm is in the process of launching Madison Centre formally for leasing, Ivanoff said. The project is expected to cost more than $250 million.
He said the market is strengthening in Bellevue and Seattle.
Hirsch said there's lots of demand in Bellevue, and that office vacancy should be at 9.5 percent by January. She said she expects it to be higher in downtown Seattle, where there are bigger blocks of space available overall, but not a lot of premium ones.
Ivanoff said tenants are being drawn to the urban core.
