Amazon has leased a massive new office tower that will be Seattle’s second tallest building, showing it’s not done growing in its hometown, despite its plan to establish a second North American headquarters.
GeekWire previously reported that Amazon had a “pending lease” for the Rainier Square project, one of the most high-profile office projects in the Seattle region. This week, the developer of the $570 million project, Wright Runstad & Co., confirmed the deal, saying Amazon is taking all 722,000 square feet of office space in the tower.
“This commitment they are making here is evidence that they are still on a pretty steep growth curve in Seattle,” Greg Johnson, Wright Runstad’s president, told GeekWire in an interview.
In addition to the office tower for Amazon, the 1.17 million-square-foot project includes 200 apartments on the upper floors of the 58-story building, which tapers off as it rises. Wright Runstad will also construct a separate hotel building on the block. All these buildings will share the block with the uniquely designed Rainier Tower, which sits on a pedestal.
Amazon does not get special priority on either the housing or hotel rooms, but Johnson said those aspects were attractive to Amazon. The company encourages its employees to walk to work, and the company is one of the biggest users of hotel rooms in town, so having places to live and stay on the same block of what will be one of its biggest office spaces in Seattle makes sense.
The project also includes 80,000 square feet of retail space above a seven-story parking garage. About 20,000 feet of the retail space will be dedicated to a “organic food market.” Given that Amazon is now the owner of Whole Foods Market, a downtown location makes sense, but Johnson wouldn’t comment on that.
Construction is already underway on the project, and Amazon is set to move in by the summer of 2020.
As Amazon has grown in Seattle, it has gobbled up nearly every piece of available real estate in the South Lake Union neighborhood and more recently in the Denny Triangle, where it is building a multi-block campus.
With those areas becoming more constrained, Amazon has started looking to the downtown core. However, Johnson pointed out that the Rainier Square project isn’t a huge stretch for Amazon since it is about the same distance from the Day One tower as some of its first South Lake Union office buildings are.
Last month, GeekWire took a look at how Amazon has transformed Seattle. In just under 10 years, Amazon’s footprint has grown exponentially. Taking into account everything Amazon owns and occupies, as well as future projects, commitments and a few deals that are rumored but haven’t been finalized, the online retail giant’s office footprint has the potential to eventually balloon to as much as 13.5 million square feet across 44 buildings.
Wright Runstad goes way back with Amazon, long before it was one of the world’s most valuable and powerful companies. Wright Runstad was the retail giant’s landlord at the Pacific Medical Center tower, on Beacon Hill overlooking downtown, until Amazon moved out in 2011 as it began its massive Seattle expansion.
The Rainier Square block is actually owned by the University of Washington. It is part of the Metropolitan Tract, UW’s original downtown Seattle campus. In 2014 Wright Runstad was chosen to redevelop the project, and just recently commenced an 80-year ground lease. That means Wright Runstad doesn’t actually own the land. It will collect rent from Amazon and other tenants, then pay a portion of that to UW as part of the ground lease.
Johnson said his team has been in communication with Amazon since it got involved in the project years ago. Talks heated up early this year as Wright Runstad was starting demolition of parts of the block to get ready to construct the tower.
Johnson said his team was talking with several of potential tenants who wanted to take the space, but didn’t have any firm commitments from them. “We had a number of conversations going with a host of users, and it was really who was willing to make a firm commitment the fastest, and that, in the end, ended up being Amazon,” Johnson said.
Amazon’s continued growth in Seattle gives a hint at what it will do in the city it chooses for HQ2. The $5 billion project could bring up to 50,000 employees to the city that wins out. Amazon has said it could occupy roughly 8 million square feet of space for HQ2.
Johnson, whose company has been responsible for many of Seattle’s signature skyscrapers, said he was not surprised by the announcement of HQ2. In addition to its explosive growth in Seattle, Amazon has been upping its presence all over the world, and in U.S. cities like New York, San Francisco and Boston. So it makes sense to Johnson that Amazon would want to concentrate its growth outside Seattle in one place.
“A lot of people have been surprised or concerned that this may be a real turning point for Seattle, and while it’s a point in time to note in the growth of Amazon, I think it’s not going to be a time we looked back on and say that Amazon stopped growing,” he said. “I think they will continue. They are just taking on a different strategy when they grow elsewhere.”