A publicly traded Taiwanese real estate development company has paid a near-record price for a downtown Seattle property occupied by a parking lot and a 101-year-old apartment building, public records show.
The total price of $20.7 million works out to $1,597 a square foot. That's not a record, but it would be if you throw out an 8-year-old sale that's considered an anomaly. The 2007 sale equaled $2,315 a foot.
On Jan. 15, Chainqui Development (TW: 2509) bought the Sheridan, a 57-unit apartment building in the Belltown area at 2011 Fifth Ave., and the parking lot next door. Aram Properties of Seattle was the seller.
This was Chainqui's second downtown Seattle acquisition in less than a year. Records show that the company paid US Bank (NYSE: USB) $5.2 million for the bank's branch at 2401 Third Ave. The branch is on nearly a third of an acre, and the purchase price works out to only $401 a foot.
The acquisitions are the latest big real estate deals involving Asian companies and individuals. Last year, overseas buyers acquired several large properties in downtown Bellevue, though they're investing in downtown Seattle, too. A Chinese group paid just over $20 million for a property in Seattle's Belltown area late last year.
Chainqui is consulting with a Seattle company called Development Services Associates on what to do with its two properties. Peter Lian, director of development planning and strategies for Development Services Associates, said Chainqui likely will build a mixed-use project on Fifth Avenue and a residential development on Third.
Lian does not think the price that Chainqui paid for the Fifth Avenue property is high.
"Actually, if you consider the development potential, it's relatively reasonable," he said, noting that zoning allows for a 400-foot-tall project. The height limit for the Third Avenue property is 125 feet, Lian said.
Richard Briscoe, a valuation expert with commercial real estate services company Kidder Mathews, said the price that Chainqui paid for the Fifth Avenue property would pencil out for apartments, if rents increase to $3.60 a square foot and construction costs do not rise significantly.
The Fifth Avenue site is just south of the Martin Apartments, a new tower that recently sold for $114 million. Rents at the Martin average $2.66 a square foot, according to Tom Cain of Apartment Insights Washington, which tracks the rental market. Another new Belltown building, the Joseph Arnold Lofts, has the highest per-square-foot rents at $3.01.
Development Services Associates has many overseas clients, Lian said. The company and some of its principals have worked in Seattle for several years.
Another director at Development Services Associates is Jim Alekson. He previously was chief operating officer at Milliken Development Group, which co-developed the 2200 Westlake Whole Foods Market (NASDAQ: WFM) mixed-use development with Vulcan Inc. Milliken sold its interest in the South Lake Union project, which also includes a Pan-Pacific Hotel and condos, to Vulcan.
In 2007, a New York group paid $30 million for a third of an acre at Fifth and Stewart. The price worked out to $2,315 a foot, though it's thought that the group paid that much to finish assembling the property for a two-tower office, hotel and condo project called Heron and Pagoda. Construction of the project was never launched, and the group lost the property.
A San Francisco company, Stanford Hotels Corp., ended up buying the Fifth and Stewart site for $16.75 million, or about $1,292 a foot. Stanford is planning a 50-story hotel and residential project called Altitude Sky Tower for the property.
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