Global nonprofit PATH will move to new Westlake building
Global health nonprofit PATH will move its headquarters from Ballard to Vulcan Real Estate's new 2201 Westlake building in South Lake Union.
Seattle Times business reporter
One of those big new office buildings under construction in central Seattle finally has a tenant.
Global-health nonprofit PATH announced Thursday it plans to move its headquarters from Ballard to Vulcan Real Estate's 2201 Westlake building in South Lake Union.
PATH said it had signed a letter of intent to lease 111,000 of the 300,000 square feet in the building nearly completed at the southwest corner of Westlake Avenue and Denny Way.
More than 300 PATH employees are to move into the new building in January.
Vulcan and PATH wouldn't discuss details of the proposed lease, other than it is longer than 10 years. But downtown office-vacancy rates have climbed and lease rates have dropped in recent months as the economy has contracted and major local companies downsize.
"This was a very good time, it turns out, for us to be in the market," said Christopher Elias, PATH's president and CEO.
2201 Westlake is one of at least eight new office buildings in or near downtown Seattle scheduled to be finished within the next year. Together, they contain about 2.5 million square feet but none had announced a major tenant until now.
Microsoft had a tentative deal to lease all 300,000 square feet at 2201 Westlake but backed out several months ago.
Commercial real-estate professionals not involved in the PATH transaction said PATH almost certainly got a better deal.
"This is a tenant's market, and it's only going to get more so," said Craig Hill, senior vice president with brokerage Grubb & Ellis.
Elias said PATH has outgrown its headquarters near the Ballard Bridge and began considering alternatives in 2007.
The organization looked seriously at constructing a new building and staying in Ballard, he said, but rejected that idea six months ago and focused on South Lake Union.
Center for health
One significant reason: the cluster of health-related enterprises already in the neighborhood, including the Seattle Biomedical Research Institute, Seattle Children's Research Institute and the University of Washington's biotechnology and medical-research hub.
Also close by: the future headquarters of the Bill & Melinda Gates Foundation, a major PATH donor.
"Even though our headquarters are in Ballard, I spend a lot of time in South Lake Union now," Elias said. "And I'm not the only one."
The neighborhood makes sense for PATH, said James Keating, senior vice president with brokerage Jones Lang LaSalle. "The word 'synergy' gets way overused," he said, "but you've got it in South Lake Union."
Kip Spencer, co-founder of the online real-estate database Officespace.com, agreed. "There's a critical mass there," he said.
"A great tenant"
Despite that advantage, Vulcan had plenty of competition for the PATH lease, said Ada Healey, Vulcan's vice president for real estate.
The market "is more challenging today than it was a year ago," she said. "The transactions, given the economy, take a little bit longer. ... But we snagged a great tenant."
According to its Web site, PATH — originally the Program for Appropriate Technology in Health — works to "create sustainable, culturally relevant solutions that enable communities worldwide to break long-standing cycles of poor health."
Its programs range from coordinating a $400 million Malaria Vaccine Initiative to creating inexpensive clean-delivery kits to help women and newborns in developing countries avoid infection during home births.
PATH reports annual revenues of more than $150 million, mostly from foundations and government.
Eric Pryne: 206-464-2231 or email@example.com
Copyright © 2009 The Seattle Times Company
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