Amazon’s Plans for Three New Towers May Swell Seattle Office Market by 7%
Amazon.com Inc. (AMZN) plans to build three commercial towers in Seattle, potentially increasing the city’s downtown office space by 7 percent, based on the company’s preliminary development plans and figures from CBRE Group Inc. (CBG)
The largest Internet retailer, based in Seattle, agreed to buy three contiguous blocks from Clise Properties Inc. and has options to buy additional “significant” sites nearby, said Chairman Al Clise, the fourth-generation head of the family- owned developer. He declined to disclose terms of the sale, scheduled to be completed later this year. It would be Amazon’s first land purchase.
“Amazon wants to plan for their future,” Clise said in a telephone interview yesterday. “The amount of new jobs and infrastructure and economic development this will provide is just amazing.”
Seattle’s downtown office market of 42.7 million square feet (3.97 million square meters) is “one of the strongest- performing” in the U.S., CBRE said in a fourth-quarter report. Office landlords had a net gain in occupied space for the seventh straight quarter, fueled by technology companies such as Amazon, according to the brokerage firm. Vacancies in the South Lake Union submarket, where Amazon is based, fell to 9 percent, compared with almost 18 percent for downtown Seattle as a whole.
“Developer confidence is building, with over 17 million square feet of office space in the planning stage,” CBRE said in the report, which didn’t account for the Amazon plans.
The company’s three towers would have as much as 3 million square feet of space, according to preliminary documents filed Feb. 15 with the city’s Department of Planning and Development.
The retailer’s property consultant, Seattle-based Seneca Real Estate Group Inc., filed the paperwork yesterday to begin the process of obtaining permits for three buildings of about 1 million square feet each, at 2001, 2100, and 2101 Seventh Ave., according to the planning department’s website.
The land is zoned for office buildings as high as 500 feet (152 meters), or about 40 stories, according to the department.
Michele Glisson, an Amazon spokeswoman, declined to comment.
The property in the Amazon deal, now mainly occupied by low-rise buildings and parking lots, is part of a 12.5-acre (5 hectare) parcel that Clise put up for sale in 2007, hoping to attract $600 million. The credit crisis prompted the company to take it off the market in April 2008. Clise wanted to sell to one buyer in hopes of spurring a unified development on the property, said Al Clise, whose family has owned some of the land since the early 1900s.
“We always thought a master-plan corporate headquarters, world-class type of development, is what needed to happen,” he said. “If it didn’t, we felt it would be a lost opportunity.”
Clise Properties’ triangular parcel is located just north of Seattle’s central business district and immediately south of South Lake Union, the neighborhood where Amazon moved its headquarters in 2010. The land is bordered by Denny Way, Westlake Avenue and Fifth Avenue.
The company leased 4.3 million square feet of offices as of Dec. 31, and an additional 44.1 million square feet of warehouse space, data centers and related facilities, according to its annual report.
Amazon employed about 56,200 people, including part-time workers, as of Dec. 31, up from 20,700 employees at the end of 2008 and 7,500 a decade ago, according to company filings with the U.S. Securities and Exchange Commission.
Amazon surpassed Samsung Electronics Co. as the No. 2 seller of tablet computers in the last quarter, shipping 3.89 million units, according to research firm IHS Inc.
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