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Real Estate Bisnow
The largest commercial real estate publication in the United States.
   
January 12, 2012 
 
 
WHAT TECH
TENANTS WANT

 
You can’t count on traditional office user developments anymore. But don't fret, all of the tech food groups (research, institutional, games, Internet retail, and so forth) will represent virtually all of the growth going forward, Touchstone CEO Douglas Howe tells us. What are these tenants looking for in a space? (And is there an app for that?)
 
For one, buildings with large (28k to 35k SF) floorplates, says Douglas. Second: Tech tenants want to be in urban environments with access to transit, retail amenities, and housing in cool trending-up neighborhoods. “That’s why they’re migrating to the Denny Triangle/North CBD, South Lake Union, Freemont/ Wallingford neighborhoods—that’s where all of the activity is.” What Douglas wants? Well, to be drinking good wine and skiing. His favorite ski spot is Whistler, BC, where he has a second home and where he spends half of his winter. Next week, he’ll be skiing in Austria and Italy.
Next year, Touchstone plans to break ground on 1.8MSF Kirkland Parkplace in the Kirkland CBD. The $800M, multi-phase tech office project sits on a 12-acre site in a high-barrier-to-entry market with big name tenants like Microsoft and Google. Five years ago, Touchstone purchased Kirkland Parkplace and has gone through a comprehensive plan amendment, zoning change, master site plan, and entitlements. “So we feel very strongly about the employment drivers on both the east side as well as the drivers on the Seattle side,” says Douglas. “And the drivers over there are slightly different.” (There’s game development, mobile devices, social Internet et al. On the Seattle side, it’s the same plus biotech, institutional research, foundations and global health.) And if the pic in any indication, look for advances in transparent people science. The only hint about Douglas's future tenants plans: "We would not build it on spec."
Colliers International SVP Tony Ford recently repped Facebook in a 30k SF lease in the Metropolitan Park Building, which borders South Lake Union. He tells us tech tenants are trending toward more open, collaborative spaces with smaller desk type work stations and fewer conventional cubes. In the last 18 months, the technology segment has been by far the largest in growth and absorption, he says, making up almost 70% of the new absorption. There continue to be plenty of larger space requirements in the market—rumor has it that Amazon is looking for another 200k to 300k SF-plus and is exploring build-to-suit options, and Nordstrom’s is in the market for another 200k SF-plus with its rapidly expanding on-line group, among others. As the above pic indicates, Tony has an affinity for wine. While he is not quite the connoisseur that Douglas is, he is building out a wine cellar at his home, which will accommodate over 1,000 bottles.
The Dark Knight may be rising, but Cushman & Wakefield’s George Denise chooses The Hulk, and it looks like they both like to go green. Deep in the bowels of the Adobe HQ in San Jose, we found George, the man who manages the all of the software developer’s space globally (3.2M  SF over 52 sites). In Seattle, he just secured the BOMA 360 designation for the Adobe Building in Freemont. It signed a 10-year lease there three years ago (and occupies the entire now LEED Platinum building). When George returns to being mild-mannered Bruce Banner, he likes to spend time at his side business, Ski Renter in Cupertino, where he rents skis and snowboards for $27 versus $74 in Squaw Valley four hours away. (Or moonlighting as the chairman of the properties committee for the local Boy Scout Council.)
BOMA International chair and chief elected officer Boyd Zoccola tells us the Adobe Building is a perfect example of what a BOMA 360-designated building is all about: “it’s achieved excellence across a comprehensive set of building operations and in management criteria.” It scored max points in nearly all sections, from energy to sustainability to training and education. George says they’ve been able to reduce electricity use by 27% and moved the Energy Star needle from 42 to 93, with the goal of reaching 100%. “Their product is cutting-edge technology,” says George. “They aspire to be the very best in everything they do.”
 
CBRE’s Scott Davis leases Woodlands Technology Center (owned by TIAA-CREF) in Canyon Park Business Center, home to medical device manufacturing, software developers (Microsoft), telecom (AT&T Wireless), aerospace (Panasonic), Life Science (CMC-ICOS), and so on. Each of those users has different needs, Scott tells us, but the general theme is the same: enhanced infrastructure, power, ceiling height, and HVAC cooling. As for the Woodlands, the four-building project has three buildings to go: the second building is shovel-ready, but three and four are still scalable (from three to seven floors), just awaiting the right tenant. Scott probably won't be moving in—he prefers the outdoors: skiing and hiking.
 
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