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Lowe Enterprises Acquires Garden-Style Apartment Complex in Everett

10 Mar 2014, 9:03 pm

By Alex Girda, Associate Editor

Lowe Enterprises recently ramped up its activity in the Pacific Northwest, becoming the latest to close a commercial-sector real estate deal in the area. The real estate investment management services company purchased Covington Farms, a multifamily complex in the city of Everett, 25 miles from Seattle, on behalf of an investment client. ARA Northwest representative Gail Neuburg handled the transaction on behalf of the seller.

Located at 10115 Holly Drive in Everett’s Paine Field area, the Covington Farms garden-style apartment community totals 352 residential units. The complex offers residents one-, two- and three-bedroom apartments, and an amenity package that includes a clubhouse, a fitness facility that also offers a basketball court, indoor and outdoor pools, as well as an outdoor gathering area for barbecues.

Covington Farms had an occupancy rate of approximately 95 percent at the time of the transaction, according to a press statement. Built in 1989, it has been managed by Greystar, which will continue to handle management duties under the new ownership.

Lowe is set to continue its activity in the Pacific Northwest, with plans to break ground this year on a 169-unit condominium project at 1321 Seneca on First Hill. Other ventures during the past few years have included the acquisition and renovation of the Red Lion Hotel on Fifth Street, as well as development of two hospitality properties with joint venture partners: Suncadia Resort in Cle Elum, Wash., and Sunriver Resort in Central Oregon.

Photo credit: covingtonfarmsliving.com

Portland Hospitality Heats Up: Lloyd Center DoubleTree Goes Up for Sale, Governor Hotel Gets New Name

4 Mar 2014, 3:04 pm

By Alex Girda, Associate Editor

Debate over the development of a major hotel-convention center in downtown Portland has been going on for quite a while. Now, a property that could influence willing investors has been put up for sale by its owner, prompting new discussions about a major hospitality project in the city. Mount Kellett Capital has reportedly hired Eastdil Secured to handle the marketing process for the DoubleTree by Hilton Hotel in Lloyd Center. The property is currently valued at around $100 million, according to the Portland Business Journal.

Located at 1000 N.E. Multnomah St., the DoubleTree-flagged property offers 477 rooms, making it the largest hospitality property in the city’s core. The property would be the main competitor of an idea, currently being shopped around by the city to investors, to develop a 600-key hotel near the Oregon Convention Center in order to boost the city’s profile as a site for meetings and major conferences. The previous owner of the facility was WMK Portland, which received $67.2 million for the property in 2011. According to the business journal, the current franchise agreement could be terminated for a fee, meaning that a new owner could completely rebrand the property, bringing in an entirely new management team.

In other hospitality news, another major property recently made headlines, as the Governor Hotel at 614 S.W. Eleventh Ave. is set to be renamed. Owner Provenance Hotel Group will soon finish a $6 million renovation of the two buildings that form the 100-key hotel, to be called The Sentinel Hotel. The current owners acquired the hotel in 2012, paying $20 million to the Royal Bank of Scotland, which took ownership of the property from an owner hit by economic strain.

 Image courtesy of doubletree3.hilton.com.

NorthEdge Office Development in South Lake Union’s Wallingford Fast-Tracked by Touchstone

25 Feb 2014, 2:27 pm

By Alex Girda, Associate Editor

A number of projects in the booming submarket of South Lake Union have raced to the development process, while others have lingered in the early stages of planning. Now, a project that had been long announced is reportedly being fast-tracked by the company in charge. Developer Touchstone recently announced that it will put the pedal to the metal on its NorthEdge, a commercial real estate development project that had been in limbo for a while.

The office building will be constructed near the Gas Works Park, occupying an entire city block bounded by North 34th Street, Woodlawn Avenue North, North Northlake Way and Densmore Avenue North in Wallingford. Once completed, the building will offer prospective tenants a total of 210,000 square feet of prime office/lab space. Developer Touchstone has selected general contractor Lease Crutcher Lewis to handle construction duties at the site.

The five-story asset will be built according to plans provided by architecture firm Perkins + Will, and will feature a 38-foot-wide central outdoor court as its centerpiece. That design flourish will aim to promote contact between the people working at the facility, while providing a relaxing common area including a series of small roof terraces and walkways that step down to the southern end of the building. Other architectural characteristics include a glass façade to the north and west ends of the building. NorthEdge will offer unobstructed views of the city’s skyline. According to the Puget Sound Business Journal, the developer currently has all the necessary financing in place for the project, and wants to get the necessary paperwork in order to meet its self-imposed groundbreaking deadline for the project, meaning that construction is set to begin this spring.

 Rendering courtesy of northedgeseattle.com

Capstone to Break Ground on Live-Work Campus in Redmond This Summer

19 Feb 2014, 7:37 am

By Alex Girda, Associate Editor

Redmond-based tech giant Microsoft Corp. is attracting new development, in the form of Capstone Partners’ newly announced massive mixed-use project in the vicinity of the software company’s headquarters. Capstone released plans for a new urban village intended as a live-work community able to accommodate around 8,000 people. The massive development project would include a large number of residential units, as well as a wide range of amenities and commercial space. According to the developer, the project will entail investment of approximately $900 million.

Capstone is naming the project Esterra Park and claims that the new live-work campus will total 3 million square feet of space. The mixed-use project will take shape on a 28-acre site located between Microsoft’s headquarters and the Overlake shopping center. According to the Seattle Times, Capstone and Lionstone acquired the site for $33 million, with the developer then proceeding to take down the 500,000-square-foot medical facilities that occupied the site. The project will be the area’s first redevelopment since the construction of Overlake Village in the 1960s.

Set to break ground this summer, Esterra Park will include 1.2 million square feet of commercial office space,  while 1,400 residential units and a 250-room hotel will complete the development. The live-work campus will also benefit from the construction of a nearby Link light-rail station that is set to be completed in 2023.  Development of Esterra Park will take place in phases, with 500 residential units and three office buildings totaling 650,000 square feet set to be developed starting this summer. The second phase would add a further 550,000 square feet of commercial office space.

Esterra Park is the second large-scale live-work community to be developed in the greater Seattle area, with the Spring District in Bellevue set to add 5.3 million square feet of mixed-use space on a 36-acre site.

Hedreen Mega-Hotel Project Clears Another Hurdle

11 Feb 2014, 2:31 pm

By Alex Girda, Associate Editor

Seattle developer R.C. Hedreen & Co. has been pushing through its initiative of developing a mega hotel project in the city’s downtown. With the Pacific Northwest’s rise to prominence in recent years, the major cities have seen their hospitality stock be reassessed as investors seek to expand the offering and improve Seattle and Portland’s convention centers, as a means of cashing in on the improving markets. The developer is now one step closer to getting its ambitious hospitality development to light, after the downtown Design Review Board has approved its new designs.

The project would call for the construction of a 41-story hotel project in the downtown area, occupying an entire city block between Howell and Stewart streets. The board has unanimously given its approval for the high-rise. The building would total 1,680 rooms, greatly improving the city’s current hospitality stock, but also a large amount of meeting space, and, according to the Puget Sound Business Journal, 156 units of affordable housing.

Design-wise, the mega-hotel will feature an angled façade, the main flourish of the LMN Architects-provided plan. According to the developer, the project will also feature a modern art installation, and it has commissioned Beverely Pepper to come up with a number of large-scale projects for the park that will be created as part of the development.  

The next hurdle that the project needs to clear is obtaining the vacation of an alley that stands in the way of the construction. That meeting is supposed to take place during the second half of February, effectively as a second review of the project in one month. However, the city council will have the final say on the issue.

Rendering courtesy of lmnarchitects.com

Hudson Pacific Agrees to $57M Fee for Merrill Place in Off-Market Transaction

28 Jan 2014, 5:41 am

By Alex Girda, Associate Editor

Hudson Pacific Properties has agreed to purchase a mixed-use asset in Seattle’s Pioneer Square submarket from a joint venture of Angelo Gordon, Nitze-Stagen and Mile Rock Capital. According to a press statement, the off-market transaction is valued at $57.7 million. The deal is slated to close sometime next month.

The object of the transaction is Merrill Place, a 200,000-square-foot asset located next to HPP’s First & King property. Last renovated in 1998, Merrill Place incorporates four brick-and-beam buildings offering ground-floor retail and office space, occupying an entire city block. Merrill Place also includes a separate parking structure that offers 147 parking stalls. The property currently boasts an above-average vacancy rate of 7 percent, with more than half of its current leases set to expire during the following four years. According to the new owner, the leases currently in place at the newly acquired property are 22 percent under Pioneer Square market levels.

Hudson Pacific is set to add value to the property through a series of improvements, including upgrading the lobby and common areas, updating the elevator, improving the property’s electrical and mechanical features, as well as introducing new tenant amenities to reposition the asset. According to the press statement, current zoning measures will give the owner the opportunity to develop a brand-new office property fronting the Alaskan Way waterfront. Paperwork will be submitted as soon as possible for the entitlement process, with HPP looking to deliver the new construction by 2017. Once upgraded, Merrill Place, as well as the new building that HPP has planned, will cater to the constantly growing tech market, a segment that is driving serious growth in Seattle’s commercial real estate market.

Image courtesy of www.nitze-stagen.com

Vancouver Apartment Community, Portland Industrial Facility Trades Mark Week

21 Jan 2014, 6:01 am

By Alex Girda, Associate Editor

The Pacific Northwest had a good week, with a number of deals closing. Peak Capital Partners purchased The Villas at Bridge Creek, an apartment complex in Vancouver, Wash., from Kingsbury LLC, and CorEnergy Infrastructure Trust Inc. paid $40 million to acquire the Portland Terminal Facility, among others.

The residential community offers 103 units, and at the time of the sale had a vacancy rate of just 4 percent. The new owner sourced the necessary funds for the acquisition through a Fannie Mae loan. Financial terms regarding the purchase fee and the loan were not publicly released. The new owner is now lining up a renovation for The Villas at Bridge Creek, with a focus on exterior improvements. The residential complex offers income restricted rental units with one- to three-bedroom apartments.

The Portland Terminal Facility, a petroleum products terminal, traded in a cash deal. The new owner is set to ink a new triple-net lease for the newly acquired facility to a subsidiary of Arc Logistics Partners LP.

The industrial property offers a number of features that were specifically targeted by CorEnergy in the acquisition process. The features include a multimodal terminal with rail, truck and shipping access points. According to a press statement recently issued by the company, the 39-acre facility has a storage capacity of 1.5 million barrels and capabilities including receiving, storing and delivery of heavy and refined petroleum products. Transportation is facilitated by the presence of the multimodal terminal, with marine access available to ships up to Panamax size.

Image courtesy of www.thevillasatbridgecreek.com

Washington State Convention Center Acquires Nearby Parcels for $56.5M While Pondering Expansion Options

14 Jan 2014, 3:33 am

By Alex Girda, Associate Editor

As the Pacific Northwest continues to grow, the hospitality markets in Seattle and Portland are growing, as well. Now both of the major cities in the area have seen the necessity of a larger convention center in order to cash in on the growing market for large events. Other cities on the West Coast have already begun their moves to expand existing convention facilities and have moved to the format of the hotel-convention center. With an expansion plan in its sights, the Washington State Convention Center Public Facilities District recently completed the purchase of a land site in Seattle’s central business district. The value of the deal stood at $56.5 million, according to The Seattle Times.

The WSCC purchased the former Honda of Seattle property, consisting of five different land parcels located between Ninth Avenue North and Boren Avenue, and Howell Street and Olive Way, from former owner Cassieford Co. of the Auburn. A Honda dealership occupies approximately 86,900 square feet of space. The Honda Center will relocate to Seattle’s Sodo neighborhood, the Puget Sound Business Journal writes. The site offers the Washington State Convention Center proximity to the Denny Triangle, the future home of the much-talked-about Amazon campus. The location is also in the vicinity of a King County-operated transit station.

According to the Times, the WSCC has been discussing expansion plans for more than a year now, and the newly acquired land parcels would offer serious options to that initiative. The possibility exists for an additional 170,000 square feet of space underground for use as an exhibit facility, as well a surface facility totaling 140,000 square feet of exhibit space. The convention center currently comprises two facilities, each offering about 100,000 square feet, a total exhibition space of 205,000 square feet. The cost for the expansion project would stand at around $650 million to 700 million.  

 Image courtesy of wscc.com

AEW Buys Renton Shopping Center from Pearlmark Harvest Lakeshore in Blockbuster Deal

7 Jan 2014, 5:04 am

By Alex Girda, Associate Editor

In a massive retail transaction, a unit of Boston-based investment fund AEW Global purchased a large Renton property Developer Pearlmark Harvest Lakeshore sold The Landing shopping center for approximately $165.4 million. JSH Properties will continue to manage the property.  

Developed in 2008, the shopping center is located on a sprawling 21-acre site and offers customers a host of shopping, dining and entertainment options. Tenants at the facility include Staples, PetSmart, Target, Panda Express, Five Guys Burgers and Fries, Red Robin and Regal Cinemas. One of the anchor tenants for the property is Dick’s Sporting Goods. According to the Puget Sound Business Journal, the occupancy rate at The Landing currently stands at slightly above 90 percent.

Metro Seattle has seen its average vacancy rate for retail dip well below the national average, data from Marcus and Millichap Real Estate Investment Services shows. A strong market combined with a steady completion pace saw vacancy rates stabilize by the end of the third quarter at the 6 percent mark. The company predicted that Metro Seattle’s rate would go even lower by the end of the year, to approximately 5.6 percent. Downtown Seattle averages 3.2 percent, while on the other end of the spectrum Tacoma stands at 8.5 percent.

Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com

Holland Partners Closes $80M Property Acquisition in South Lake Union, with Plans for M-U Development

23 Dec 2013, 5:01 am

By Alex Girda, Associate Editor

The approved rezoning of South Lake Union, one of the most popular development areas in the much improved city of Seattle, is already paying off. The Puget Sound Business Journal recently reported that Holland Partners, one of the most active development companies in the local market, recently completed the acquisition of a number of properties in the area, and is now eyeing a mixed-use development project. The acquired area was previously targeted as a development site by Equity Office Properties Trust. Holland paid a total of $79.5 million for almost a block between Dexter and Westlake avenues.

The company will now look to come up with a master plan for what was previously set to become the home of an 825,000-square-foot mixed-use project. That project was announced by former owner Equity Office back in 2007, when the project called for office, retail and residential units to be developed at the site, divided across five six-story structures. Westlake Steps, as the canned project was set to be named, was sold to Holland Partners by an affiliate of Equity and parent The Blackstone Group. Blackstone’s involvement came around six years ago, when it acquired a large chunk of the former’s portfolio in a blockbuster $39 billion transaction.

Due to the aforementioned rezoning plan, Holland will be able to build towers as tall as 12 stories. According to PSBJ, the developer does not own the entire block, with other properties not yet spoken for. However, Holland will take into account the feedback of its new neighbors as it tries to come up with a master plan for the area between Westlake and Dexter.

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