SEATTLE—Stockbridge Capital Group and Capstone Partners, developers of Dexter Station in Seattle's South Lake Union neighborhood, officially welcomed Facebook Inc. to the newly constructed 10-story building. The company will lease 274,000 square feet at Dexter Station with an option for the remaining two floors.
The deal marks the largest office lease ever executed in Seattle by a company headquartered outside the region, says Stockbridge Capital Group. Capstone Partners, based in Seattle, developed Dexter Station with equity and financing from San Francisco's Stockbridge Capital Group.
The deal affirms the development group's unwavering confidence in the South Lake Union market: Dexter Station was fully constructed prior to the signing of any leases. "We're so delighted to have a company of this caliber in the building,'' says Terry Fancher, executive managing director of Stockbridge. "Capstone has done an excellent job of executing the vision for this project.''
Dexter Station is an unconventional design ideally suited for a technology company, with larger floors and more building infrastructure per floor to support a higher-density workforce. LMN Architects designed the building, which includes multiple large roof decks, LEED Gold certification, higher ceilings and much larger windows than typical buildings to highlight the stunning views. Dexter Station includes a state-of-the-art conference center and workout facility, retail services, and nearly as many bike racks as parking stalls.
Mike Hubbard of Capstone Partners says that "We had great confidence in this location and this particular design. Technology companies do not have two to three years to wait for a project to come on line - they need space they can occupy in 12 months or less.''
The result was ideal, adds Stephen Pilch of San Francisco based Stockbridge Capital. "We have seen the progression of technology firm's use of space in the Bay Area over the last several years; we were confident that our plan would work."
Construction of Dexter Station was completed earlier this month by JTM Construction, with support from Prime Electric and Holaday-Parks. Stuart Williams, Joe Gowan and JJ Sheppard are the JLL leasing team.
As GlobeSt.com previously reported in early 2013, the cost to build the building is around $136 million. Dexter Station was also the first speculative office development in the Puget Sound since 2008, we reported.
Both Capstone and Stockbridge Capital are also active elsewhere in Seattle. Stockbridge, with development partner Daniels Real Estate, has begun construction on a $400 million 43-story office building in downtown Seattle that will include the SLS Seattle luxury hotel. As GlobeSt.com previously reported, the project includes the historic renovation of the adjacent First United Methodist Church sanctuary.
Stockbridge also recently purchased Rollin Street Flats, a 208-unit multifamily complex in South Lake Union, for $138 million, as GlobeSt.com reported.
Dexter Station is one of many active projects for Capstone in the region. Next door to Dexter Station, Capstone and partner Holland Properties, developed The Union, a 284-unit apartment building that was completed in 2013 and is 98% occupied.
Capstone also purchased the 28-acre former Group Health site next door to Microsoft's world headquarters, where it will create Esterra Park, a development of nearly 3 million square feet of commercial and residential building, as GlobeSt.com previously reported. Early this year at Esterra Park, Avalon Bay commenced construction on the first 500 units; a new 275-room Starwood Hotel will break ground in June. Capstone is preparing to break ground on more than 600,000 square feet of office on the site.
Capstone also is very active in Portland, with multiple mixed-use projects and a large speculative warehouse project near the airport.
Stay tuned for the upcoming issue of Real Estate Forum, which goes more in depth on Seattle and other growth markets around the nation. For more information on Forum, or to participate in the next issue, contact Greg Christensen.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
