The latest Denny Triangle project includes up to 1,000 apartments in two towers, “vertical neighborhoods” with terraces on upper-level floors, according to city records.

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A national high-rise residential developer has filed a plan with Seattle for two 39-story towers in Denny Triangle that could add as many as 1,000 apartments in one half-block.

An affiliate of Miami-based Crescent Heights owns four parcels on Minor Avenue between Virginia and Stewart streets and has approached the city about buying a municipal parcel at the corner of Minor and Virginia.

Crescent’s proposal shows big investors are still hungry to own apartments in Seattle — especially near Amazon.com’s global headquarters in South Lake Union — despite a construction boom that already has boosted supply in three years by 25 percent.

“It’s a lot considering what’s already in the pipeline,” said Seattle market analyst Brian O’Connor, who’s not involved with the Crescent Heights project. But “we’re in a rental era, not an ownership era.”

Crescent Heights, a Miami-based residential developer, is seeking to build as many as 1,000 apartments in two 39-story towers in booming Denny Triangle. Source: City of Seattle (Kelly Shea / The Seattle Times)
Crescent Heights, a Miami-based residential developer, is seeking to build as many as 1,000 apartments in two 39-story towers in booming Denny Triangle. Source: City of Seattle (Kelly Shea / The Seattle Times)

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Developers have more than 18,000 apartment units under construction in King County, with most of them in Seattle, according to Dupre+Scott Apartment Advisors. The market-research firm forecasts that between now and 2017, developers will open more than 7,300 units in downtown Seattle, more than any other submarket in the region.

The area around Crescent’s Denny Triangle site is a hive of apartment, office and hotel construction activity.

On an adjacent block, AMLI and Mortenson Development are building a 41-story tower with about 410 units. Just north of that, Security Properties is building a 40-story tower called Kinects at 1823 Minor that will have about 360 units.

And to the north, Vancouver, B.C.-based Onni Group has proposed delivering nearly 2,000 units in multiple towers on two full city blocks it bought from The Seattle Times Co. City officials say it could take at least six months to a year for Onni to get a permit.

On its website, Crescent says it has developed more than 35,000 residential and hotel units in 15 urban markets.

Starting in 2012, more new apartments were built in Seattle than in the rest of King County. A huge wave of apartments is expected to open between now and 2018 to keep up with demand. Source: Dupre+Scott Apartment Advisors (Kelly Shea / The Seattle Times)
Starting in 2012, more new apartments were built in Seattle than in the rest of King County. A huge wave of apartments is expected to open between now and 2018 to keep up with demand. Source: Dupre+Scott Apartment Advisors (Kelly Shea / The Seattle Times)

In San Francisco’s Central Market, across from Twitter’s headquarters, Crescent built NEMA, a four-tower luxury development with 754 units and landscaped terraces on upper floors. On the third floor, a terrace features a 60-foot heated lap pool and a communal fire pit. The 11th-floor terrace has BBQ grills and outdoor televisions.

Similarly, at its Seattle project at 1901 Minor Ave., Crescent said it wants to “build vertical neighborhoods” with terraces on upper-level floors, according to city records. The cost of the proposed buildings is undisclosed.

Demand for apartments in downtown Seattle remains high. Last year King and Snohomish counties set a record, filling up 11,010 new and existing apartment units, with Seattle accounting for two-thirds of that, O’Connor said.

Cielo, a new 335-unit apartment tower at 800 Seneca St. on First Hill, is 52 percent leased. The average rent for new leases is $2,460. Premiere on Pine, another luxury tower that opened on First Hill, has leased more than 60 percent of its 386 apartments.

This year, 57 percent of new Seattle-area households are renting rather than buying, O’Connor said. Just over a decade ago, only 13 percent rented, he said.

Millennials’ tastes and budgets are driving the shift toward demand for rentals.

“It’s the affordable way to get the lifestyle they’re looking for,” O’Connor said.

On the supply side, developers prefer to build apartments over condos because condo prices aren’t high enough to justify new construction costs, O’Connor said.

It’s also more lucrative to sell an apartment project to one big investor than a condo unit to individuals, he said.

“We’re getting these big, big capital funds, and they don’t want to do a little deal,” O’Connor said. “They love these big towers because they can place a huge amount of capital in one place.”

On Monday, CWS Capital Partners paid Laird Norton Properties and Unico Properties $40.4 million for The Lenora Apartments, a 107-unit, six-story apartment building with street-level retail space at 211 Lenora St.

The apartments, which had been student housing for the Art Institute of Seattle, will be renovated over the next six months and rent for almost $2,000 a month, said Gary Carmell, president of CWS, which invests on behalf of high net-worth individuals.