A subsidiary of Create World Group in Hong Kong purchased property in Seattle’s South Lake Union for $16.25 million, making a total of three U.S. investments, according to public records.
The seller, Beverly Hills-based Wilshire Capital LLC, has already received a master use permit for a 26-story apartment tower on the site, located at 427 9th Avenue, making it the tallest multifamily building in the neighborhood. According to Dave Speers, a senior vice president and partner for Kidder Mathews in Seattle who was involved with the transaction, Create World America Construction Management LLC, headquartered in Bellevue, will most likely move forward with Wilshire’s approved project.
There are many high-end employees down there, and that’s who will rent these residential buildings
“They have the latitude to do something different, such as condos, but I think they’re going to build virtually what was already permitted,” said Speers. “All they have to do is pull some building permits and pay some fees, and they are off and running. They could start building next month.”
The approved 244-unit project, designed by Vancouver-based Via Architecture Inc, is a mid-block tower that will take full advantage of the new zoning capacity, which allows some projects to build higher and denser when certain requirements are met. It will feature a roof garden with amenity space, restaurant space incorporated into the lobby, street-level retail and widened sidewalks for cafes, bicycle parking and landscaping.
Sam Wayne, a senior research analyst for Colliers International in Seattle, says it isn’t uncommon for developers to sell properties that have been granted a permit to build. In fact, it increases the property’s value. In a market where the process takes approximately 18 months, some developers are finding it profitable to cash in before breaking ground. In neighborhoods where property is in high demand, such as South Lake Union, this may be more common.
Downtown Seattle Association says South Lake Union is one of Seattle’s fastest developing neighborhoods that is home to its biotech community, as well as Amazon’s new campus. It is also seeing several new restaurants, coffee shops and retailers. The association also believes the neighborhood is one that has yielded exceptional livable, walkable spaces with effective transportation, sustainability and recreation.
“A lot of activity is going on in South Lake Union right now, and not just from Amazon who anticipates between 30,000 to 35,000 employees,” said Speers. “Google will have several thousand employees there as well, and Vulcan has built several new buildings for the University of Washington. There are many high-end employees down there, and that’s who will rent these residential buildings.”
According to Kidder Mathews 2016 First Quarter Seattle Apartment Report, the primary demand driver for apartment units is population growth which is mostly supported by employment growth. The latest employment figures for the greater Puget Sound region are estimated at 2.09 million jobs. Dupre + Scott Apartment Advisors Spring 2016 Vacancy Survey states that the regional housing vacancy rate is estimated at 3.3 percent, says the same report. Speers says high volumes of construction in South Lake Union may affect the neighborhood’s vacancy rate, however, he believes it will absorb well into the submarket.
Along with the newly acquired project in South Lake Union, Create World recently purchased another property near Pike Place Market that includes air rights to allow for a large floor plate. The developer also broke ground on a 175-unit 17-story upscale residential tower in Bellevue that will feature indoor and outdoor lounges, a rooftop terrace with an outdoor kitchen and a pet service area.