Amazon buys another block in Denny Triangle
Amazon.com paid Clise Properties $52.2 million Friday for nearly an entire city block near its future high-rise campus.
Seattle Times business reporter
Amazon.com exercised an option Friday to buy nearly an entire city block next to its future high-rise campus in Denny Triangle, paying Seattle’s Clise Properties $52.2 million, public records show.
The block, bounded by Seventh and Eighth avenues and Bell and Blanchard streets, is currently home to Budget Car Rental, the Hurricane Cafe, parking lots and a former motel leased to Cornish College of the Arts.
A spokesman for Seattle-based Amazon said the company had no comment, while Clise Properties said chairman and CEO Al Clise was out of town and unavailable.
Despite the online-retail giant’s seemingly endless appetite for expansion, the move caught some real-estate-industry watchers by surprise: Its option to buy the block didn’t expire until December 2015, according to an agreement recorded with King County.
“It shows they’re just extremely bullish on their future,” said Matt Christian, executive director of brokerage Cushman & Wakefield/Commerce in Seattle, who wasn’t involved in the deal. “We haven’t seen anything like this in Seattle before.”
Amazon hasn’t even finished building the first phase of the 3.3 million-square-foot high-rise campus it dubs “Rufus 2.0,” and it’s still pursuing long-term leases for office space in the area.
The company now leases or owns about 3.2 million square feet of office space in the area, and is reportedly near a deal to lease Blanchard Plaza at 2201 Sixth Ave.
Assuming 170 square feet per worker, a typical ratio for technology firms, observers say it’s fair to say Amazon may now have more than 18,000 employees working in the area. Amazon doesn’t break out its local employment.
In December 2012, Amazon paid Clise Properties $207.5 million for the three blocks on which it’s constructing the high-rise campus. As part of those negotiations, Amazon obtained options to buy the property it purchased Friday as well as the half-block across Seventh Avenue.
Amazon also has the right of first offer on 1½ blocks immediately to the north across Bell Street.
Amazon also paid $1.16 billion in December 2012 to buy its 11-building headquarters campus in South Lake Union from Vulcan Real Estate.
Friday’s closing on the city block next to its future high-rise campus means Amazon now controls the full block, after previously paying $4.3 million to buy a small parking lot on the block from a different seller.
Cornish College has been told by Clise to vacate the two leased motels on the block by mid-2015, said Karen Bystrom, the college’s director of communications. The college plans to build a new residence hall on a parking lot it owns at the corner of Terry Avenue and Lenora Street and open it in the fall of 2015, she said.
So far, Amazon hasn’t filed any development plans for the block, according to city officials. The site’s zoning allows for mixed-use commercial buildings up to 340 feet and residential buildings up to 400 feet, officials say.
It’s possible Amazon exercised its option to buy the block simply as a defensive move, real-estate brokers say.
Rising rates for office space and scarce buildable land in the area mean that Amazon will have a valuable asset even if it simply holds it for a decade or two.
Anyhow, quipped one broker, “They would lose all their views if someone built right next to them.”
Sanjay Bhatt: 206-464-3103 or firstname.lastname@example.org. On Twitter @sbhatt