News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
Port of Seattle Taps Panattoni for 87-Acre Business Park
The Port of Seattle has chosen Panattoni Development Co., Inc. to develop the Des Moines Creek Business Park project on 87 acres south of Seattle-Tacoma International Airport.
The Newport Beach, CA-based privately-held real estate development firm was picked from a field of four companies to develop a combination of airport-related commercial and light industrial uses at the project valued up to $125 million.
The development will include up to 2 million square feet of flexible-use, manufacturing, office, distribution and industrial business park buildings, with build-out expected in several phases over seven years. Ground breaking for the first phase could be as soon as the summer of 2014.
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The Des Moines Creek Business Park is bounded by South 208th Street on the north, 24th Avenue South on the east, South 216th Street on the south, and by a portion of Des Moines Creek Park on the west.
Des Moines Mayor Dave Kaplan said Panattoni was selected "from a very competitive list of national real estate development firms" to develop the project next year, which Kaplan described as the most important single economic development project in the city’s 55-year history.
The vision is to create a business park that will be well-positioned for large-scale users seeking a close-in location to the airport and seaport, said Bart Brynestad, partner with Panattoni’s Seattle office. The Port will be entering into exclusive negotiations for a long-term ground lease with Panattoni to be brought to the Port Commission for final approval.
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Building Cost Index Rises As Construction Pace Gradually Quickens
Non-residential construction costs rose in the second quarter as larger urban markets appear to be expanding more rapidly than other regions, according to Turner Construction Co.'s most recent Building Cost Index.
Turner's Second Quarter 2013 Building Cost Index measuring costs in the U.S. non-residential building sector was 859, an increase of 1.18% from the previous quarter and 4% from the same quarter a year ago.
In addition to rising activity in larger urban areas, contributing to the increase is the limited capacity among trade contractors with the available resources to manage and work on large, complex projects, said Karl F. Almstead, the Turner vice president in charge of the Cost Index.
"While lower global demand is maintaining downward pressure on material and equipment costs, there is upward pressure on specialty equipment and material costs in growing building types such as data centers," Almstead said.
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Grant Park Village Project Slated for Fall 2014
Capstone Partners LLC and partner PCCP, LLC have launched construction of Grant Park Village, a $60 million mixed-use development on NE Broadway between 32nd and 33rd avenues in Portland, OR.
The project includes 211 market rate apartment units in five buildings above a 34,500-square-foot New Seasons market and 13,000 square feet of storefront retail space, and a 269-space parking garage. Construction, with the help of a construction loan from Key Bank, started earlier this month and occupancy is scheduled for fall 2014.
Grant Park Village, located next to the historic Grant Park neighborhood, is within walking distance or retail, parks and other amenities. Described by Capstone Partners principal Chris Nelson as a "built-in neighborhood community," the development in Portland, one of the nation's strongest apartment markets, is also near transit and biking connections.
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Madison Realty Backs Victoria Tower With $50M Loan
Madison Realty Capital (MRC) has closed a $50 million bridge loan financing for Victoria Towers, a mixed-use development, along with an additional property in downtown Flushing, Queens.
Victoria Towers is a 95% complete, 21-story residential condo that contains about 150,000 gross square feet. It is comprised of 99 residential units totaling 108,000 sellable square feet from floors 5 through 21, one commercial condominium totaling 24,194 sellable square feet and 88 below-grade parking spaces.
Madison was able to quickly analyze the large, complex property and understand and help simplify its capital structure, and complete the transaction within the timeframe required so the borrower could finish up construction of the condos, said Josh Zegen, co-founder and managing member of MRC.
The Flushing area has seen significant business and job growth for the past seven years, and real estate sales and rental pricing has strengthened as a result.
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District 600 Apartment Construction Under Way
Construction of the 78-unit District 600 apartment project has started at 600 Fifth Street North in the North Loop neighborhood of Minneapolis.
Completion and occupancy of the 93,869-square-foot building is planned for June 2014, according to project developers Michael Development, Inc., St. Croix Real Estate, Inc. and Residential Renewal, Inc.
The six-story project next to Fulton Brewery, designed by architectural firm Collage Architects, includes first-floor retail space planned for a new restaurant, five-stories of residential homes and two levels of underground parking.
The property is across the street from the proposed Hennepin County transit plaza, The Interchange, and less than a block from Target Field, the Minnesota Twins baseball stadium.
Bremer Bank is the project lender and Michael Development will be handling the property management and leasing. The project has received assistance from Hennepin County under its Transit Oriented Design (TOD) Program for transit friendly development.
Developer Begins Prado Student Housing Project
Fountain Residential Partners has broken ground on the latest of three new student developments totaling almost 1,400 beds of housing.
The projects will serve the University of Texas, San Antonio; the University of Houston main campus and the University of Minnesota, Twin Cities. Leasing will begin in the coming months for fall 2014 occupancy.
The latest project, Prado, is located across the street from the UT San Antonio campus on UTSA Boulevard next to The Block, an eating establishment. The project will accommodate 498 students and a 6,000 square foot restaurant fronting UTSA Boulevard.
At The University of Houston, The Vue on MacGregor will provide 347 beds of new housing in a five-story modernist design at the Tier One research institution.
Metro Park East at the University of Minnesota in Minneapolis, broke ground in April and will deliver 551 beds of housing.
Dallas-based Grand Campus Living will provide leasing and management services to the three communities.
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