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Originally published June 16, 2007 at 12:00 AM | Page modified June 16, 2007 at 2:02 AM

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One big chunk of downtown Seattle up for sale

The sale could mean that an area dominated by parking lots and low-rise buildings is transformed with structures up to 40 stories high.

Seattle Times business reporter

Clise family


A portfolio with history: J.W. Clise began investing in real estate after the 1889 fire that destroyed much of downtown Seattle. Clise Properties' present CEO, Al Clise, is his great-grandson.

Properties: Clise is selling about a dozen parcels totaling almost 13 acres.

Setting the stage: The 1989 CAP Initiative set lower limits on development in the Denny Triangle, so Clise sat on its properties. The company was an active backer of Mayor Greg Nickels' plan last year to allow taller, skinnier buildings in much of the downtown area. It now expects to capitalize on that new zoning.

Value: Developable land downtown historically has sold for $35 to $60 a square foot, according to real-estate professionals. With the potential for more than 10 million square feet of development, Clise's properties could fetch $350 million to more than $600 million.

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For sale: A big swath of prime downtown real estate — and the chance to change Seattle's skyline.

After accumulating property on downtown's doorstep for four generations, the prominent Clise family is putting on the market nearly 13 acres in the Denny Triangle.

The sale could mean that an area dominated by parking lots and low-rise buildings is transformed with structures up to 40 stories high, as allowed under the city's new tall-but-skinny zoning.

"It's a very unique assemblage of real estate that probably doesn't exist anywhere else in the country," said Al Clise, chief executive of Clise Properties. "We have been chewing on this for over a year now, and we think the time is right."

Clise's decision to sell comes a year after the city increased height limits in the Denny Triangle to encourage more commercial and residential development. It also comes at a time when solid job growth is driving up demand for new office space, allowing landlords to raise rents to levels not seen since the 2001 recession.

The sale is expected to set off a bidding frenzy among deep-pocketed investors from throughout the world. It merited a story Friday on the cover of The Wall Street Journal's Marketplace section.

Based on recent sales of downtown land, outside real-estate professionals estimated that the portfolio could sell for $350 million to more than $600 million.

Clise family


A portfolio with history: J.W. Clise began investing in real estate after the 1889 fire that destroyed much of downtown Seattle. Clise Properties' present CEO, Al Clise, is his great-grandson.

Properties: Clise is selling about a dozen parcels totaling almost 13 acres.

Setting the stage: The 1989 CAP Initiative set lower limits on development in the Denny Triangle, so Clise sat on its properties. The company was an active backer of Mayor Greg Nickels' plan last year to allow taller, skinnier buildings in much of the downtown area. It now expects to capitalize on that new zoning.

Value: Developable land downtown historically has sold for $35 to $60 a square foot, according to real-estate professionals. With the potential for more than 10 million square feet of development, Clise's properties could fetch $350 million to more than $600 million.

"This really could bring more international cachet to Seattle," said Michel Seifer, managing director of capital markets for Jones Lang LaSalle, the real-estate-services firm handling the sale for Clise.

"The sheer size and scope of it should have global appeal."

The Clise parcels have the potential for more than 10 million square feet of new buildings — more than six times the size of Columbia Center. The land covers seven full blocks stretching north from downtown's retail district to Denny Way.

A remake of the Denny Triangle would be rivaled only by what Microsoft co-founder Paul Allen is doing in South Lake Union, where he has the capacity to develop more than 10 million square feet on 60 acres.

So far, Allen's Vulcan has completed eight buildings totaling 1.4 million square feet.

"Downtown is moving north," said Robert Arron, Vulcan's director of real-estate marketing. The decision by Clise to sell "basically enhances what already is a very nice downtown, and helps Seattle become a truly walkable, 24/7 urban center."

Clise's great-grandfather, J.W. Clise, began buying portions of the Denny Triangle after a fire in 1889 destroyed much of downtown. The Clises continued to invest in the Denny Triangle in the belief that downtown development would spread north, and it appeared in the 1980s that they were finally about to hit pay dirt as lots to the south became built-out.

But in 1989, an anti-growth citizens initiative passed by a landslide, setting lower limits on building heights.

The Clises held on to their land and considered cashing out only after the city adopted new rules last year allowing developments in the Denny Triangle to rise 40 stories or more.

With a core staff of 35, Clise Properties is too small to develop the land on its own, Clise said. He hopes to complete the sale by year's end, though he reserves the right to not sell if bids come in lower than expected.

Clise said the family will hold on to properties it already has developed, including Nordstrom's headquarters building at 1700 Seventh Ave.

He said he envisions a mix of developments, including condominiums, office buildings and hotels.

"We're open to everything, from A to Z," Clise said.

About the only thing he won't consider is selling the land piece by piece.

"I would like to see it developed in a way that has vision and integrity and creates housing and jobs," he said.

Clise's approach pleases Kate Joncas, president of the Downtown Seattle Association, which promotes the development of an urban core where people increasingly live, work and play.

"If you do one piece at a time, it doesn't always add up to a cohesive neighborhood," she said. "This will mean we have a new neighborhood."

Last year, real-estate professionals nationwide named Seattle the most attractive place to buy and own office property in a survey released by the Urban Land Institute.

At the same time, Seattle garnered national attention as one of the few places where demand for new condominiums outstripped supply.

But it remains to be seen if Clise waited for just the right moment to sell — or a little too long. Anyone looking at all the construction cranes on the downtown skyline may wonder how much more development it can handle.

"It's a very competitive market, both from a residential and office perspective," said Rosie Rios, managing director at MacFarlane Partners, a San Francisco-based real-estate-investment management firm.

"There's definitely lots under construction, and product isn't moving as quickly."

Seifer, of Jones Lang LaSalle in San Francisco, said bidders "will have to see the value and what can be created here.

"You're not going to see this built overnight," he said.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com

Reporting by Seattle Times reporter Bob Young was used for this story.

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