By Jon Peterson
China-based China Vanke Co. and Walnut Creek, Calif.-based Laconia have joined forces on a $200 million apartment development project in Seattle located at 600 Wall Street. The project will have a total of 400 units and some ground floor retail.
“It’s our opinion that the Seattle market has gone from a region that is shifting from for-sale condos to for-rental apartments and we want to be part of that trend. We think that our new project should benefit being three blocks from where Amazon has its headquarters,” says Bob Kagan, a senior vice president with Laconia.
I know that there are a lot of units being added to the market. I still think that it’s an area with strong demand led by the tech industry and that should continue in the future
The site where the property is located is currently being used as a parking lot. The development is expected to break ground sometime during the first quarter of 2017. “We are expecting that the units should be delivered to the marketplace about 18 months after we start construction,” said Kagan. The developer is expected at some point in the future to arrange construction financing on the project.
600 Wall Street will be the first investment in the Seattle market for China Vanke Co. and its first ever investment with Laconia. The apartment development company has one other apartment project that it owns in Seattle. This is the 335-unit Cielo project located at 800 Seneca Street. It was completed in May of last year.
Laconia is a long-term believer in the Seattle apartment market. “I know that there are a lot of units being added to the market. I still think that it’s an area with strong demand led by the tech industry and that should continue in the future,” said Kagan. In 2016, there is expected to be 5,241 apartment units added to the Seattle central business district, according to research data from Chicago-based Heitman.
Laconia as a company typically does not hold on a to assets that it builds for the long-term. The company becomes a seller once it constructs a project and the asset becomes stabilized. Most real estate developers consider stabilization to be when a project is 90 percent occupied or higher.
China Vanke is the largest real estate developer in China. Outside of its traditional market of mainland China, Vanke has partnered with real estate developers such as Tishman Speyer, New World Development and Keppel Land, to co-invest in development projects in U.S., Hong Kong and Singapore. Vanke Holdings USA is a subsidiary of China Vanke Co., Ltd. for its businesses in the U.S. The company entered the North American market in 2013 when it announced a partnership with Tishman Speyer to build 655 residences in San Francisco, a development called the Lumina.