Dendreon eyes Russell Center tower as new headquarters

Up-and-coming Seattle biotech Dendreon, in the market for a new headquarters for nearly two years, now appears headed to downtown's 42-story Russell Investments Center.

A Seattle architect firm filed plans with the city earlier this month to modify the interiors of the tower's 36th, 37th and 38th floors for a new tenant, identified in the plans as Dendreon.

The company could be leasing up to eight floors, said real-estate sources familiar with the downtown market.

Dendreon is "exploring all options, and this is one," spokeswoman Tricia Larson said in an e-mail Thursday." No final decision has been made, she said, declining further comment.

A spokeswoman for the Russell Center's owner, manager and leasing agents also declined to comment Thursday.

The Dendreon lease is one of the biggest pending in greater downtown, and the company's decision has been anxiously awaited in real-estate circles.

The Russell Center, formerly the WaMu Center, became a poster child for the recession's impact on downtown Seattle when its former owner, Washington Mutual, collapsed and the building emptied two years ago.

If Dendreon does move its offices to the Russell Center, it almost certainly would have to locate its labs elsewhere. The Russell Center can't accommodate such uses.

One likely possibility, according to real-estate insiders, is the four-story Earl Davie Building on Eastlake Avenue East in South Lake Union, now leased by ZymoGenetics. It has been available for sublease for at least a year, according to commercial real-estate databases.

Dendreon, based in Seattle since 1998, now occupies about 130,000 square feet of office and lab space in three buildings in Belltown and along the waterfront. All those leases expire this year, and the biotech said in 2009 that it was looking for up to 250,000 square feet on the waterfront or in South Lake Union.

The company got a huge boost last April when the Food and Drug Administration approved its application to market Provenge, a prostate-cancer therapy that is the country's first cancer-treatment vaccine.

Days later Dendreon announced it had signed a letter of intent to lease all 191,000 square feet in developer Martin Selig's new 635 Elliott building on the waterfront. Subsequent permit activity indicated it also might take half the space in companion 645 Elliott, for a total of about 260,000 square feet.

But months passed without any lease being signed, and Dendreon said in November that it was pursuing "all opportunities."

Selig declined comment Thursday.

The three floors in the Russell Center that are included in the Dendreon tenant-improvement plans submitted to the city contain about 65,000 square feet. If Dendreon takes eight floors, that would be about 170,000 square feet.

The 886,000-square-foot Russell Center, at Second Avenue and Union Street, was built in 2006 by Washington Mutual, which occupied the entire building until the bank was seized by the Federal Deposit Insurance Corp. and sold to JPMorgan Chase in 2008.

Chase laid off 80 percent of WaMu's headquarters employees, vacated all but three floors in the tower, then sold it in September 2009 to Wisconsin insurance giant Northwestern Mutual for a bargain-basement price of $115 million.

Russell Investments, a Northwestern Mutual subsidiary, became the building's anchor tenant, moving from its longtime Tacoma headquarters.

Since then Northwestern and Unico Properties, the building's manager, have executed a succession of leases — Nordstrom is the largest — filling more than 60 percent of the tower.

But the high-rent top floors, from 29 to 42, remain unleased, according to commercial real-estate databases.

While office space in greater downtown Seattle remains plentiful, lab space is scarce. The vacancy rate for life-sciences space in the city is less than 3 percent, Bill Neil and Chris Moe of brokerage Kidder Mathews estimated in a recent report.

The only existing building coming on the market anytime soon, they wrote, is the Fremont headquarters of the Institute for Systems Biology, which is moving to South Lake Union in May.

Dendreon is Seattle's hottest biotech. The company is expanding Provenge manufacturing plants in New Jersey, California and Georgia, and earlier this year said it would seek approval to market the treatment in the European Union.

The company also announced earlier this month that it had raised another $600 million from investors. At the close of trading Thursday Dendreon's market value was $4.9 billion.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com