Los Angeles-based Kilroy Realty Corp. on Tuesday formally broke ground on 333 Dexter, a two-building project in Seattle's South Lake Union area.
The $370 million project will have 630,000 square feet of office space and a smaller amount of retail when it opens two years from now.
JLL is marketing the office for lease, and Kidder Mathews is handling the retail leasing. Swinerton Builders is the general contractor on the project, which was designed by the Miller Hull Partnership architecture firm.
We spoke with Kilroy President and CEO John Kilroy about his decision to start the project.
In your 50 years in commercial real estate, have you ever seen a market as hot as Seattle's? I've seen similar markets. We entered San Francisco in 2010 and are now the largest owner and, I think, the largest developer in the city. We came in during the downturn and we hit it perfectly because that city went through a major expansion just as you are experiencing here. Seattle has probably the best performing office market in the country right now.
The 333 Dexter project is your first ground-up development in the Puget Sound region. What took you so long? I kick myself a couple of times a week that we didn't get involved in a bigger way earlier here. That's the beauty of 20/20 hindsight.
How does Seattle's office market compare to San Francisco? San Francisco limits the amount of square footage that can be entitled. It's called Prop M. It is putting a governor on future growth. Here in Seattle and Bellevue it's more predictable as to what you can build, so I think Seattle is beautifully positioned for ongoing growth.
Have you pre-leased any space at 333 Dexter? I can't comment on that, but it's interesting if you look at the statistics right now there's a very low vacancy rate in South Lake Union. There's a real problem with a supply imbalance right now.
In California markets, Kilroy builds mixed-use projects with office, residential and retail. Will Seattle see some of that? I'm sure you will. Obviously we have to assemble sites. We have a great team here and we fully intend to see the company be involved in Seattle and Bellevue for many years with many projects ahead of us.
For the full story, go to Puget Sound Business Journal.
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