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TACOMA, WA-A year ago, the Pacific Steps development by Opus Northwest was planned as 400,000 sf of office and retail in a pair of high rises to be constructed in two phases. Since, responding to significant shifts in the office market, the project has been downsized and right-sized a handful of times. Now on Opus’ planning board for Phase I is a 150- to 200-room limited-service hotel, and Phase II (still expected to be a mix of office and retail) has a wait-and-see status.

Chris Burdett, a hotel broker with the Seattle’s hotel division of Colliers International, is assisting Opus in its search for either a chain or individual that would develop and operate a 150- to 200-room limited service hotel on a portion of the 1.15-acre site. Opus’ expectation is that the hotel would catalyze its office and retail project. At this point, Opus is in the midst of researching the financial feasibility of such a project.

Says Burdett of the type of hotel envisioned, “It would be a mid-scale product like a Hilton Garden Inn or Courtyard–not a full service hotel like a Marriott or Westin. The reason is you can’t get the rate out of concrete and steel (of which this project would be constructed. Full-service hotels need to be wood construction. “While Burdett was not at liberty to divulge names, he says discussions have been taking place with a number of potential hotel developers.

Before any development plans can be moved forward, Opus needs to consummate on its option to buy the 1.15-acre site on Pacific Avenue, between S 13th and S 15th Streets, which is owned by Pierce County. It is the City of Tacoma, under a joint agreement with the county, spearheading the sales and development efforts on the property. Thus far, Opus has been granted several months’ worth of extensions, the most recent being a 90-day extension, which will run through the end of August.

Mark Clirehugh of Kidder Mathews & Segner in Tacoma has been the broker charged with finding office and retail tenants since the project was first planned. Clirehugh says, should Opus need additional time, it would be required to begin making monthly extension payments of $10,000.

In discussing market conditions that have precipitated the scaling back from the much larger complex originally targeted, Clirehugh tells GlobeSt.com, “We’ve got a soft market right now. It’s a terrific project, but we need the market to help us. We need a unique tenant that could carry the freight needed to kick it off. (Bart) Brynstad (Opus’ senior real estate director) is willing this project to happen. He’s a hometown guy, and if it weren’t for his perseverance this project wouldn’t happen.”

Clirehugh adds, “I’m cautiously optimistic that if we can buy some time we’ll get an anchor tenant. But I can’t tell you if it be 90 days, 120 days or 24 months. Opus has had immense patience. The county also gets credit for working strongly with Opus to help achieve the goals here.”

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