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August 25, 2014

Well-known apartment builder launches first office project in Seattle

Puget Sound Business Journal

Marc Stiles

Holland Partner Group, known in Seattle as a developer of big apartment projects, has begun building its first-ever office building. The six-story project, 1101 Westlake, will rise along the southwest corner of Lake Union.

The building is part of the Westlake Steps mixed-used project, which also will include around 570 apartment units. Holland is speculating by starting construction even though no space in the building has been pre-leased.

"We got the permit yesterday and they are going today," Holland Development Director Marc Gearhart said Friday.

The 1101 Westlake building is one of about a dozen major office projects under construction in the Puget Sound region, with the bulk of the development occurring around Lake Union. By commercial real estate company JLL's count, nearly 1.7 million square feet of office was under construction across the region at the end of the second quarter. That's the most in six years.

That Holland is building an office project seems surprising given its reputation as an apartment developer. In this part of Seattle alone, the company has built or is planning around 1,800 apartment units. In Oregon and California, the company has developed about 1 million square feet of industrial space, "but this is the first ground-up, speculative office for Holland," said Gearhart. He other Holland officials previously worked for Opus, which was one of the region's most active office developers until closing several years ago.

At 150,000 square feet, the 1101 Westlake project is among the smallest new office projects under construction around the lake, and Holland plans to use that to its advantage. A tenant could secure naming rights to the building, where city rules would allow a large sign that Gearhart said would be visible from Interstate 5.

"A mature tech tenant that is not 400,000 square feet could have that visibility in South Lake Union," said Gearhart, who noted that's unusual in Seattle, which is known for its tight rules on allowing signs on downtown Seattle buildings. The city loosened the rules in South Lake Union when new zoning was OK'd last year.

Holland is touting the project's proximity to Lake Union Park as well as its location between Amazon.com's headquarters and Fremont, where Google, Tableau Software and other tech companies operate. To complement its spot by the park, the building will have bike and kayak storage.

Another plus is 1101 Westlake's anticipated completion date in late 2015. That will make it one of downtown Seattle's first new office projects available for move-in. The history of the project gave Holland a head start. Westlake Steps has been in the works since 2007. A previous developer, Equity Office Properties, was planning 825,000 square feet of office, retail and residences, but the company and Blackstone Group sold the property to Holland last year for $79.5 million.

NASH, or North America Sekisui House Limited Liability Co., is Holland's financial partner on 1101 Westlake. NASH is the U.S. business operations unit of Sekisui House Lit., one of Japan's largest real estate developers. Gearhart declined to say how much the 1101 Westlake project is costing, but based on per-square-foot industry standards the estimated cost would be around $64.5 million.

Bellevue-based MulvannyG2 designed 1101 Westlake, which will have 13-and-a-half-foot floor-to-floor ceiling heights on the top five floors, and Interior Architects (IA) is designing the interiors. Amazon.com is an IA client. Other team members are Coughlin Porter Lundeen, civil engineering; and DCI Engineers, structural engineering. Holland Construction is the general contractor.

Commercial real estate brokers Lloyd Low, Joe Lynch, Bob Conrad and Dan Harden of Kidder Mathews are marketing the 1101 Westlake office space space for lease. Gearhart declined to provide the asking rents, saying only that the building is "competitive to the market."

For the full story, go to Puget Sound Business Journal .

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