First Hill Medical Pavilion, Seattle

Other parties struggled with how to effectively convert a building with obsolete mechanical infrastructure and no onsite parking into a next-generation healthcare project. Add to that long-term tenants at the base of building and you had an adaptive reuse project that confounded almost everyone—except Trammell Crow Co.

At acquisition, the building was 9% occupied with leases longer than 15 months. The property, located at 1124 Columbia St. in Seattle's First Hill submarket, occupied a city block and consisted of three interconnected structures: the life-sciences building, a 186,288-square-foot, seven-story-plus basement lab built in the mid-1970s with a reinforced concrete structure, designed in the “brutalist” style with exposed-concrete exterior; Eklind Hall, a 43,740-square-foot, six-story-plus basement lab building, originally designed and built in the 1940s as a nurses' dormitory; and Vivarium Annex, a 44,540-square-foot, three-level, below-grade concrete animal facility built in 1982, with eight parking stalls and an entry turnaround. To complicate matters further, the life-sciences building connected to Swedish Hospital via a basement tunnel, and ventilation intake and exhaust structures in Vivarium Annex extended above the parking level.

In addition to developer TCC, the project team consisted of equity partner Washington Capital Management, construction lender Wells Fargo Bank, architect Collins Woerman, general contractor Crutcher Lewis, property manager and leasing broker CBRE, structural/civil engineer DCI Engineers, mechanical engineer/subcontractor McKinstry and electrical subcontractor Prime Electric. The team found a design that optimized the shell and core improvements, added 60,000 square feet, provided a new direct-access elevator core from all levels of the garage to the existing and new portions of the building and determined a construction plan that allowed 70,000 feet of existing tenancy to remain in place during the 18- month renovation.

The finished product was a 225,000-square-foot class A MOB with 411 parking stalls and 45 bicycle spaces—nearly all in subterranean garage. The building is 100% leased, with average expiration of 9.2 years. The results exceeded the team's expectations by reducing operating costs over 21% and achieving rents that were 20% greater than competing assets. The building was leased up 12 months faster than planned and sold two years ahead of pro forma at a market setting price of $884 a foot (a 35% premium to the highest healthcare building in the market).

Sky Bridge Solves Cross-Border Dilemma

Cross Border Xpress, San Diego/Tijuana

For decades, leaders in the San Diego/Baja California region had discussed concepts to leverage Tijuana International Airport—including a cross-border runway and developing a twin airport—to no avail. Otay Tijuana Venture LLC realized that with Tijuana's airport a few steps from the international line and with undeveloped land in a barren, industrial part of San Diego just across the other side of the border, the geographic situation presented an opportunity for a unique solution like CBX. With few shared routes between TIJ and San Diego's airport, they realized an opportunity to strengthen the travel industry on both sides of the border without creating competition between the airports.