By Jack Stubbs
Seattle’s Capitol Hill neighborhood—widely regarded as a desirable area to locate, due to its proximity to the Central Business District and bustling retail and dining options for city residents—has been the site of several multifamily property sales over the last two quarters.
And the recent sale of a historic office building—which is slated for the development of a 396-unit affordable housing project—indicates that the neighborhood is viewed favorably by commercial investors as well.
On February 25th, OZ Navigator, a Seattle focused opportunity fund led by members of Nitze-Stagen and Housing Diversity Corporation (HDC) spent $29.75 million to acquire a three-parcel property just south of Capitol Hill. The seller was Seavest Realty Inc., another Seattle-based firm that offers commercial, retail and multifamily property management services throughout the Pacific Northwest.
The three parcels, located at 900, 912 and 1130 Rainier Avenue South, include the historic 62,000 square foot Black Manufacturing Building along with approximately 40,000 square feet of development capacity, according to a statement released by QZ Navigator. Ultimately, the project will include 396 units of workforce and affordable apartments across two eight-story buildings, along with outdoor courtyards and street level retail on Rainer Avenue South.
Through the city of Seattle’s Multifamily Tax Exemption (MFTE) and Mandatory Housing Affordability Program (MHA), OZ Navigator is studying a unit mix that will include two- and one-bedroom units and small efficiency apartments.
The underway project will be proximate to the Judkins Park Light Rail Station—scheduled to open in 2023—and will be designed as a transit-oriented development. The Black Manufacturing Building will be preserved as commercial space with associated parking.
OZ Navigator have engaged Streetlight Ventures to assist in identifying an authentic mix of neighborhood retail uses for the project. “Streetlight Ventures specializes in the placement of small businesses to ignite positive neighborhood momentum,” said Peter Nitze, CEO of Nitze-Stagen, in the company’s statement.
“They will also work with the existing businesses located on the two parcels to help them relocate during construction. As an opportunity fund comprised of local entrepreneurs we are committed to the success of local businesses and hope that this project can serve as a model for development in the neighborhood.”
For the Early Design Guidance process the team has been consulting with Neiman Taber Architects, a firm that specializes in urban, affordable housing. “We want to design equitable housing that provides a range of needs and encourages social diversity,” commented Brad Padden, CEO of Housing Diversity Corporation. “A goal of this project is to maintain the authenticity of the neighborhood and build community among the residents.”
The project is anticipated to break ground in late 2021.
Nitze-Stagen & Co.’s capture of the property adds to the company’s growing portfolio of projects throughout Seattle, with a number of developments underway that will look to add a new dimension to the city’s existing—and changing—fabric.
Starbucks Center, a mixed-use retail/office/warehousing/distribution facility totaling 2.1 million square feet and comprising 17 acres of industrial land in Seattle’s ever-evolving SODO neighborhood, is home to various tenants—and also serves as the world headquarters for the Starbucks Coffee Company, according to Nitze-Stagen & Co.’s web site.
The company completed a full seismic renovation of the building in 2003, all-the-while looking to preserve its historical heritage and adding modern technological and structural upgrades. “Built in 1912 by the Union Pacific Railroad to lure Sears, Roebuck & Co. to Seattle, the original warehouse building was constructed of heavy timbers sourced from the historic Yesler Mill,” the web site states.
Some of Nitze-Stagen & Co.’s other developments in Seattle include the under-construction Canton Lofts in the historic Pioneer Square neighborhood, which will ultimately provide 80 units of workforce housing upon its expected completion in early 2021. In October 2019, the company held a groundbreaking for Canton Lofts, a project that the company hopes will go some way to addressing the long-term housing affordability crisis facing Seattle.
“For the past few years, we have focused on bringing the Pioneer Square community together to revitalize the neighborhood. A vital part of that is creating affordable housing so people can live and work in Downtown,” remarked Seattle City Council member Sally Bagshaw at the groundbreaking event. “This partnership between Nitze-Stagen and community investors brings exactly the kind of workforce, transit-oriented housing that we need.”
Another project is the underway revitalization of a manufacturing facility in Seattle’s South Lake Union submarket. Located at 760 Aloha St. the roughly 41,500 square foot redevelopment will entail the conversion of a mid-century warehouse to office space. “The building has a distinct warehouse appearance common to its era and represents one of the few remaining properties in South Lake Union with authentic character and charm,” the company’s web site states.