The 100,000-sf first phase, a renovated Washington Natural Gas building at 9th Avenue North and Mercer Street, was completed and occupied last year, three years after the lease deal was originally struck. The original deal included an option for this second phase.
The two new buildings will be located on the south and west portions of the same block that holds the University's existing leasehold. In addition to 9th Avenue and Mercer Street, the borders are 8th Avenue North and Republican Street.
Very similar to the Washington Natural Gas Building lease, the Phase II lease agreement has a 35-year term plus a 10-year extension option. A source at the University's real estate division tells GlobeSt.com that, technically, the ground lease, development agreement and building leases are held by Washington Biomedical Research Properties II, a nonprofit corporation that will pass through all costs to the University. What exactly the UW will pay to lease the buildings from the nonprofit was not available on Monday.
The estimated cost of the project is $150 million. The project architect for Phase II is MBT Architecture. The general contractor is Sellen Construction. Occupancy is scheduled for June 2008. The University's expected lease rate is expected to be $37 per sf per year, not including operating costs of around $13 per sf per year, according to the University's real estate department.
"We're pretty well out of space here on our main campus [on the north side of Lake Union]," says the University's Bruce Ferguson. "We were looking for a location that would provide us enough space to really give us a significant concentration of research and researchers, and that would be reasonably proximate to the University and our research partners including the Fred Hutchinson Cancer Research Center and the Seattle Cancer Care Alliance, of which we are a one-third owner."
In March 2004, "Fred Hutch" leased the majority of 1616 Eastlake, a 165,000-sf building owned by Alexandria Real Estate Equities and located about one mile away from the UW's South Lake Union leasehold. Fred Hutch shares the building with Accelerator Corp., a biotech incubator project of Alexandria, three venture capital firms and the Seattle-based Institute for Systems Biology.
In July 2004, Vulcan sold a 14,000-sf lot in the South Lake Union neighborhood to the Seattle Cancer Care Alliance. That property also is about one mile away from UW's leasehold. The SCCA plans to develop the site with affordable housing for the families of patients undergoing treatment. The planned six-story, 75-unit facility is expected to get under way in 2007. In addition, the SCCA already operates the Pete Gross House, a 70-unit apartment building for patients and families, located on Minor Avenue North, close to the Alliance's outpatient clinic on the Fred Hutch campus.
Prior to signing the lease deal for the Washington Natural Gas Building in late 2002, UW already leased the Rosen Building at Terry Avenue North and Republican Street. The building was renovated several years ago by Vulcan and Schnitzer Northwest. The University is in the early years of a 14-year lease for that building.
Vulcan owns approximately 60 acres in Seattle's South Lake Union neighborhood. Vulcan has delivered 650,000 sf of new development in the South Lake Union area in the past two years and has about 900,000 sf currently under development. An additional 2.1 million sf of development is in the planning process.
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