Vulcan revealed the latest piece in its extreme makeover of the South Lake Union area yesterday: a two-tower office, residential and retail...

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Vulcan revealed the latest piece in its extreme makeover of the South Lake Union area yesterday: a two-tower office, residential and retail project at Westlake Avenue and Denny Way.

The proposed 450,000-square-foot project would cover half a block and complete transformation of the busy intersection into a flashy gateway for the biotech and commercial hub billionaire Paul Allen’s company is building in the neighborhood.

It’s also the latest major office development proposed for the area north of downtown Seattle, where competing developers are elbowing each other in a race to be the first to break ground.

Vulcan’s yet-to-be named project would combine street-level stores with an 11-story office building and an 18-story residential tower with 100 units.

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The complex is a sister to the company’s 2200 Westlake under construction across the street. That 456,000-square-foot development combines a luxury hotel, condominiums and a Whole Foods grocery store.

A Vulcan condominium sales center is to open next month on another corner.

The company, which owns 60 acres in the South Lake Union area, said construction of the new project could start by the end of the year.

Timing will depend largely on Vulcan’s success in finding tenants to fill much of the 302,000 square feet of office space.

With Seattle’s office-vacancy rate hovering around 15 percent, that could be difficult. To complicate matters, several proposed projects north of downtown would compete for the same potential tenants.

In fact, the field is getting downright crowded. Proposals include:

• Clise Properties’ 31-story office and condominium tower at Westlake and Seventh avenues.

• Schnitzer Northwest’s 600,000-square-foot office project at Ninth Avenue and Stewart Street.

• Armada/Lagerquist’s 150,000-square-foot office building at Sixth Avenue and Blanchard Street.

• Touchstone’s 600,000-square-foot Stewart Place office project.

Touchstone plans to take advantage of proposed zoning changes to enlarge a proposed Westlake Plaza office tower to 28 stories and rechristen it West Eighth at 2001 Virginia.

“A lot of the buildings proposed now don’t even have their [basic permits] yet,” said Jesse Ottele, a CB Richard Ellis broker representing Armada/Lagerquist in Seattle.

“You are going to have to see significant pre-lease before any of those buildings kick off.”

Vulcan has run into trouble with that before.

The company and its partner, Milliken Development, delayed the launch of 2200 Westlake because they couldn’t find anyone for the office space originally planned for the project.

The office portion was eventually replaced with a Pan Pacific hotel.

But the company also has shown a knack for landing plum tenants in a down market.

It has leased most of the office portion of its Alley24 development at nearby Yale Avenue North and John Street to architecture firm NBBJ and builder Skanska.

Vulcan also lured clothing maker Tommy Bahama to its 428 Westlake building, which opened last month.

Vulcan said strong sales of 2200 Westlake’s condominiums — about half of the 261 units have been reserved so far — persuaded the company to move forward on the new project despite uncertainty in the office market.

“It takes about one year to plan and two more years to deliver,” said spokesman Michael Nank.

“Our sense is there is a rebound in the office-market space, and when that happens three years from now, you want some product to address that.”

J. Martin McOmber: 206-464-2022 or mmcomber@seattletimes.com