Amazon is still a year away from moving into the first of its trio of planned 37- and 38-story office towers on three blocks in Seattle’s Denny Triangle, but already the tech juggernaut is planning more construction.
The rapidly expanding company will meet with a city design-review panel next week to discuss plans for large office buildings on an adjacent fourth block it owns.
If Amazon follows through on that proposal, it will have nearly 9 million square feet of office space occupied, under construction or proposed, based on a Seattle Times review of public records and interviews with office brokers.
The latest plan, for more than 800,000 square feet on a block Amazon bought in January, underscores its huge and still growing presence: Even without the construction under way, Amazon already leases or owns about 4.2 million square feet of offices — equal to one-eighth of downtown Seattle’s roughly 32.5 million square feet of Class A office space.
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“We have never seen a tenant anywhere near this size or with this much impact on the Seattle market,” said Matt Christian, executive director at Cushman & Wakefield Commerce.
Investors’ enthusiasm for Amazon has cooled somewhat this year as the company rang up quarterly losses while spending heavily on faster distribution systems, new hardware devices and expanded cloud services.
But the company shows no sign of easing up on its growth or its appetite for real estate.
Amazon owns its 1.7 million-square-foot main South Lake Union campus, leases more than 2.5 million square feet, and has a whopping 4.7 million square feet under construction or proposed.
Based on industry standards, that footprint could accommodate more than 45,000 workers in downtown Seattle.
Only one company has a larger footprint in the region’s office market: Microsoft has nearly 15 million square feet, two-thirds in buildings it owns. Most of that is on the Eastside, including its Redmond campus.
The region’s other tech players pale by comparison. T-Mobile has about 800,000 square feet in the Interstate 90 corridor; Google, about 750,000 square feet across the region; and Expedia, about 477,000 square feet on the Eastside.
When Washington Mutual was the shining star of downtown Seattle’s corporate world — before its 2008 collapse — the nationwide banking giant leased or owned less than 3 million square feet in downtown Seattle, brokers say.
The city already has approved Amazon to build a 3.3 million-square-foot office complex on the three Denny Triangle blocks it acquired from Clise Properties in December 2012. On each block, Amazon is building a 37- or 38-story tower and a smaller building.
The company is on track to move into the buildings on the first block late next year, Amazon spokesman Ty Rogers said Tuesday. It expects to occupy the two remaining blocks where it has permits in 2016 and 2017.
Last summer, Amazon inked leases for about 572,000 square feet across four sites in Seattle’s Belltown, Denny Triangle, Cascade and waterfront areas.
Amazon also has signed a lease with Seattle Children’s to occupy a building — code-named “Andes” — at 1915 Terry Ave. after renovations are completed.
Landlords cash in
Amazon’s spreading presence has powered the market for new buildings downtown, but as it now builds more for itself, developers doing speculative construction “need to assume they’re not going to get Amazon,” said Jesse Ottele, a senior vice president at commercial brokerage CBRE in Seattle.
Still, Amazon has been a boon to office landlords, who often have been quick to sell their buildings once they sign the company to a long-term lease:
• July 2013: Spear Street Capital in San Francisco sold the Metropolitan Park North to Los Angeles real-estate investment trust Hudson Pacific Properties in a package deal for $367 million.
• September 2013: Spear Street and First Western Development Services in Edmonds sold 202 Westlake to Munich, Germany-based GLL Real Estate Partners for about $97 million, which set a new sales record on a per-square-foot basis for the region.
• Last December, a joint venture of Talon Private Capital and Prudential Real Estate Investors sold 1800 Ninth Avenue to Chicago-based Heitman for $150 million, nearly double what it traded for two years earlier.
Now, commercial real-estate brokerage JLL is listing 15-story Blanchard Plaza at 2201 Sixth Ave. for sale. In April, Amazon leased the entire building, about 256,000 square feet, from owner Shorenstein Properties, records show.
Amazon’s expansion has kept apartment construction purring, too. Nearby, GID Development Group is building a 41-story luxury apartment tower.
And Clise Properties is proposing a 40-story apartment tower at Eighth Avenue and Blanchard.
2 visions for Block 21
On Tuesday, Amazon is scheduled to share with the city’s design-review board the initial plans for what it calls Block 21, before applying for a master permit.
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. Amazon paid Clise Properties $52.2 million in January for all but one parcel on the block. It bought the other parcel for $4.3 million in 2012, records show.
Amazon has proposed two separate but similar visions for the block, depending on whether the city grants its request to privatize a through-block public alley.
The block’s zoning allows for nonresidential structures up to 340 feet high.
If the city allows the alley to be vacated, Amazon proposes three buildings with a total 835,200 square feet of offices and 35,000 square feet of street-level retail, as well as underground parking for 835 vehicles.
Given that option, Amazon would develop a 24-story tower along Seventh Avenue and Bell Street connected to an adjacent seven-story structure at Eighth Avenue and Blanchard Street. The plan also calls for a one-story building on Seventh.
If the city denies Amazon the alley, the company would build a 24-story structure along Seventh and a six-story building along Eighth.
For this block, Amazon’s latest plans don’t offer anything as whimsical as the attention-grabbing, five-story bubblelike office building it proposed last year as part of its three-block tower complex.