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June 18, 2024
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Seattle Mixed-Use Development Secures Joint Venture Equity and $196 Mil in Construction Money


A development partnership made up of Touchstone, a Seattle developer, and Portman Holdings of Atlanta, has obtained joint venture equity and $196.2 mil in construction financing for Chapter Buildings I and II in Seattle. The Chapter Buildings will be new Class A buildings in Seattle’s University District (U-District), featuring life sciences, office and retail space.

The Chapter Buildings will consist of two buildings totaling more than 400k sf and make up the largest private commercial project in the U-District, where several apartment towers have been built, are under construction or planned. Chapter Building I (4530 12th Ave NE) will be 12 stories with 240k sf of office space and 9k sf of ground-floor retail. The 10-story Chapter Building II will rise on the east side of Brooklyn Avenue Northeast and have 154k sf of life science and research and development, and 4k sf of retail.

The Chapter Buildings are adjacent to the University of Washington, one of the world’s preeminent public universities in impact and funding with $1.63 bil in sponsored research grants and contracts. The U-District, which is home to a growing office and life sciences presence, is located within 10 minutes of South Lake Union and downtown Seattle.

Construction of Building I commenced earlier this year and construction of Building II will begin in late-2022, with expected delivery in 2024.

Tom Pehl, Charles Safley, Todd Tydlaska, James Scott and Brian Myers of CBRE Capital Advisors led the equity sourcing. Touchstone, a subsidiary of Urban Renaissance Group, and Portman are developing the mixed-use commercial project in a joint venture with Houston-headquartered Lionstone Investments. Brad Zampa, Mike Walker and Megan Woodring of the CBRE Debt & Structured Finance team in San Francisco represented the Chapter Buildings development partnership in securing construction financing.

“While there remains a healthy appetite for financing new life science product, the continued volatility in the capital markets coupled with ‘work from home’ has caused many lenders to hit the pause button on financing office product. However, we are finding ample liquidity for best-in-class sponsors building state-of-the-art trophy assets in key submarkets. The flight to quality for both capital and tenants is real,” noted Zampa.

According to a new report from CBRE, the Puget Sound region is the ninth-largest U.S. market for life sciences talent. The overall number of life sciences researchers in the Seattle area grew 24% from 2015 to 2020, the seventh-fastest growth rate among the 25 leading markets. The region also has the nation’s fifth-highest concentration of life sciences researchers as a share of its total labor force.

CBRE’s Greg Inglin, David Abbott and Laura Ford are marketing the Chapter Buildings project for lease.

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