SEATTLE-A partnership that includes locally based Lexas Cos. has closed on a $175-million construction loan for Escala, a 30-story condominium tower that will rise at the southeast corner of Fourth Avenue and Virginia Street, one block north of Westlake Center. Excavation work begins later this month. Completion is slated for 2008.
Lexas is developing the 850,000-sf, 280-unit project with Rreef's Real Estate Opportunity Funds. Both companies are providing the equity necessary for the construction loan. The construction lender is Fremont Investment & Loan. Fremont VP and regional manager Nancy Sulse could not be reached Tuesday for comment.
Escala's units will range from 950-sf one-bedroom units to 16,000-sf penthouses. All units have terraces that add 10% to 20% to the unit's floor area and private elevator vestibules will serve most condominiums. Asking prices range from the mid-$500,000s to more than $4 million, not including the penthouses. The estimated gross sellout for the project is $350 million.
Ownership includes membership in a 25,000-sf club on the second floor that includes a gym, pool, spa, theater, wine cellar and lounge. Two restaurants also are planned for the building. A little more than half of the units have been reserved with refundable deposits, according to Lexas. A presentation center is slated to open later this fall.
JE Dunn Construction Co. is handling the demolition, shoring and excavation work. All parking will be contained in eight floors of subterranean garage that will require the second-deepest excavation in city history.
Lexas principal Joseph Strobele tells GlobeSt.com that some of the funds from the construction loan have been released and the rest will be released when the equity in the deal has been exhausted. A general contractor for the vertical construction has not yet been selected, Strobele says.
The building was designed by Thoryk Architecture of San Diego. MulvannyG2 Architecture of Bellevue is the architect of record. DiLeonardo International, Inc., of Rhode Island is the interior designer.
Lexas has completed several other condo projects in the region, all of them much smaller in scope than Escala, but the company's principals have had high-rise experience. Lexas is led by Redmond, WA resident Joseph Strobele, formerly VP of Northwest development for Legacy Partners, and John Midby, a veteran developer based in Las Vegas.
In response to slowing sales and rising construction costs, condominium development in other parts of the country has slowed while sales remain strong in the Puget Sound region. Strobele tells GlobeSt.com it is due in part to the likes of Starbucks, Boeing, Nordstrom and Microsoft driving job growth in the region. In addition, there is an emergent biotech market, the nation's worst traffic and, as everywhere, baby boomers with empty nests looking to downsize and urbanize.
With a strong market comes lots of competition. Escala is one of several high-rise residential projects under construction in Downtown Seattle. Strobele says all of the other projects that are underway are substantially pre-sold. "With financial markets cooling to high-rise residential nationally, there will be maybe 800 to 1,000 units that will get off the ground this cycle," Strobele says. "And most of the stuff being built is pretty much absorbed or reserved."
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