By Jon Peterson
Seattle-based Vulcan and Google are planning a build-to-suit office development in South Lake Union, the two firms announced earlier this week. The office project will include a total of four buildings totaling 607,000 square feet that will be leased to Google exclusively and located along Mercer Street between Terry and Fairview Avenue North.
“This structure of this project is that Vulcan owns the sites and will also own the buildings at completion. These are build-to-suit offices for Google, which they will lease. The lease terms on the buildings range from 14 to 16 years,” says Lori Mason Curran, director of real estate for Vulcan. She declined to state the total cost of the development.
This will have a substantial position impact on the sub-market neighborhood and the city of Seattle as a whole
Vulcan believes this project will have a definite economic impact on South Lake Union going forward. “This will have a substantial position impact on the sub-market neighborhood and the city of Seattle as a whole. South Lake Union development has delivered more than $180 million in cumulative tax revenue to the city since development began in earnest in 2004. A significant portion of that comes from real estate taxes, which provide a recurring source of revenue for the city,” said Curran.
The first phase of the development is planned to be started next year. The initial part of the project will have a total of 430,000 square feet in three buildings. This will include two buildings on Block 31 covering 291,000 square feet and one building on Block 25W for 139,000 square feet. The idea is then to start construction of the second phase, which is Block 25E for 177,000 square feet well before the first phase is done. The entire project is planned to be completed sometime in 2019.
The build-to-suit will also have retail and a total of 151 market-rate apartments in the project. Vulcan anticipates a wide range of renters with jobs in the neighborhood to be in the apartments. “We expect the apartments to be attractive to people working in South lake Union, [which] could include Google employees or employees that work at the many other diverse companies in the neighborhood. In addition, people who do not work in South Lake Union but want to live in an urban neighborhood with all of its benefits and amenities should find these apartments appealing,” said Curran.
The project will also have some ground floor retail. This will total 14,000 square feet and will likely include a mix of restaurants, shops and other services.
Vulcan invested $4.3 million of incentive zoning fees for this project for affordable housing and a daycare center. “This capital goes to the city of Seattle, and it decides where those funds get invested. For example, a portion of the fees paid for the Amazon development that we built in South Lake Union went toward two projects in the neighborhood that were developed by non-profit low income housing providers. The Williams Apartments were built by Plymouth Housing, and Compass on Dexter was built by Compass Housing,” said Curran.