‘RENTON’S GOING TO HAPPEN’ – Moves by Blue Origin, UW and the Sounders have changed the fortunes...
Puget Sound Business Journal, February 18, 2022
An announcement this week that the Seattle Sounders FC is moving the club’s headquarters to the Longacres campus marked the latest in a string of wins for Renton.
The suburban city is in a much better place than it was a year and a half ago, when news surfaced that Boeing was selling the 158-acre property that had served as its commercial airplanes headquarters. The first win came in November at Southport, the $590 million lakefront mixed-use property, when project developer Seco’s plan for a 1.1 million-square-foot expansion emerged.
Seco was taking on the expansion despite having leased none of the 700,000-plus square feet of office space. In January, a Bellevue company confirmed it would relocate, taking 20,000 square feet and becoming the first tenant in the three office towers that opened two and a half years ago. “Renton’s going to happen,” said Craig Pankow, market president of The Partners Group, the insurance, wealth management and employee benefits company that’s moving to Southport.
Mayor and lifelong resident Armondo Pavone has been hearing this since 1985 when he opened a restaurant downtown. “People would come into the restaurant and they would say, ‘You know, Renton is just right on the edge. It’s ready. It’s going to take off. It’s going to be the next Bellevue, the next Redmond.’ I’ve heard that year after year after year,” he said. It’s finally happening. “There are so many things that are lined up,” the mayor said.
Who’s coming to town The Sounders’ announcement Wednesday was just one part of the Longacres news. The new owner of the campus, Seattle-based Unico Properties, also is planning around 3,000 units of multifamily housing on the property named for the horse racing track that operated there for 59 years until 1992.
The redevelopment, with the Sounders moving into 50,000 square feet of former Boeing office space, is next to a heavy rail station with Sounder and Amtrak service. The overall 10-year build-out cost likely will exceed $1 billion, Unico Chief Investment Officer Ned Carner said. Other notable developments in Renton are on the horizon, too. The University of Washington is consolidating a medical lab’s operations in a vacant five-story office building. UW already has leased two of the floors with the Board of Regents scheduled to finalize the deal for the entire building in March.
Vulcan Real Estate said it’s on track to start building a 385-unit apartment project on a long- held property in the Kennydale neighborhood next year. And, according to market sources, Blue Origin leased nearly 100,000 square feet of office in a Lind Avenue Southwest building. Multifamily development booms City Community & Economic Development Administrator Chip Vincent pulls up a map of Renton and points out multifamily and other developments across the city.
In addition to the thousands of units at Longacres and Vulcan’s Kennydale Landing project, around 650 residential units are going up on the old Hi-Lands shopping center on Northeast Sunset Boulevard, and more than 1,200 units are planned for the former Fry’s Electronics store. The old Sam’s Club is being converted into a Home Depot.
All total, Renton has nearly 8,100 residential units in the works along with more than 1.2 million square feet of commercial space. Fueling the growth is a mix of factors — Renton’s reputation as a pro-business city, Kent- headquartered Blue Origin and cost.
“Blue Origin is going to take more office space for sure,” said a broker who asked not to be named to protect business relationships. The reason: the available-for-poaching Boeing talent.
Office rent in Renton is a relative bargain compared to Bellevue, with Renton’s $35 to $40 a- square-foot rate as much as $30 a foot less. This is expected to attract medical office users to Renton’s health care cluster of the headquarters of Providence Health Systems, Kaiser Permanente Washington and UW Medicine/ Valley Medical Center, which last year moved into a new medical office building on South 43rd Street. Add to that UW, with its plan to consolidate operations of the Department of Laboratory Medicine and Pathology in Renton in a 193,000-square-foot space. “Numerous” locations were considered over the course of several years for the consolidation, and Renton was selected due in part to “very reasonable lease terms,” a UW summary of the deal states.
A renaissance in Renton “We’re not going to be able to help ourselves in terms of the overflow with what’s going on in Bellevue,” Mayor Pavone said, noting Sound Transit’s planned bus-rapid transit project will help. Scheduled to open in 2026, the Bellevue-to-Burien Stride line will run through Renton and include a new transit center in South Renton and a stop across the street from Vulcan’s Kennydale Landing. That was a draw for Vulcan, said Lori Mason Curran, the company’s director of real estate investment strategy. She also cited the character of downtown with its “cool little restaurants.”
Kenneth Rogers, co-owner of Rain City Catering, years ago saw the potential of downtown, where this spring he plans to expand with the opening of Rain City Market, a higher-end convenience store with a full kitchen. He compares what’s occurring in downtown Renton, where new apartments are attracting younger renters, with the renaissance of Seattle’s Columbia City neighborhood. “I’m seeing more people walking dogs than I have in my life. Downtown Renton is coming alive. It’s cheaper than Seattle. A lot of people are moving in,” Rogers said.
Michael Christ, founder and CEO of Seco, has a special appreciation for what’s transpiring in Renton. He made a huge bet at the turn of the century, paying $7.1 million for an idle steam plant that became Southport. But two years ago market observers were quietly incredulous when with no signed tenants for the completed first phase Seco paid $23.5 million for more land, including where the 1.1 million-square-foot expansion is planned. “It used to be people would go to where the offices are,” Christ said, noting the new work habits that Covid introduced. “People have a choice now with the work-from-home opportunity. … The offices are going to go to where the people are, and Renton is ripe for that.” Based on touring activity by prospective tenants, he thinks “big tech” will take one or two of Southport’s existing towers. “We have enough right now in negotiation that I’m confident that more than one tower’s full,” he said.