Aging Seattle buildings now environmentally sound
After a green retrofit, the Joseph Vance and Sterling buildings in downtown Seattle are using less energy but commanding higher rents, their owner says.
Seattle Times business reporter
New York developer Jonathan Rose vowed to make the Joseph Vance and Sterling buildings the greenest old office buildings in Seattle when he bought the downtown properties in 2006.
He told his investors the buildings would make money, too.
Three years later, Rose says, the aging buildings at Third Avenue and Union Street have exceeded his expectations, both environmentally and financially.
Occupancy is up. So are rents. And, after a $3.5 million investment in new systems, fixtures and other improvements, energy consumption has dropped significantly.
Heating costs alone have dropped 43 percent.
Rose, a nationally known proponent of "smart growth" and sustainable development, said Wednesday that his Rose Smart Growth Investment Fund is looking to purchase more office and multifamily properties in the area.
It's a good time to buy, he said: Thanks to the recession, buildings are more affordable now.
Rose's fund focuses on acquiring and "greening" existing buildings in downtowns or other walkable, transit-oriented neighborhoods. It's the right thing to do environmentally, he contends, and it's likely to be more profitable over time than investing in real estate in auto-dependent suburbs.
Rose was in Seattle Wednesday to speak to the local chapter of the Urban Land Institute. He told his audience that each year new buildings add just 1 percent of the nation's office inventory.
Climate change will be more difficult to reverse if the other 99 percent of that inventory isn't retrofitted, he added. His fund is doing just that with buildings it has acquired in Baltimore; New York; Santa Fe, N.M.; and New Haven, Conn., as well as Seattle.
New buildings remain the focus of most sustainable building design. But Rose said that's starting to change.
In Seattle, Starbucks Center, built in 1912, and 901 Fifth Avenue, constructed in 1972, are among a half-dozen local buildings that have been recognized by the U.S. Green Building Council for upgrades that reduce their environmental impact.
The century-old Joshua Green Building is undergoing a renovation that incorporates green features.
The 14-story Vance Building and adjacent, three-story Sterling Building were built in 1929 and 1910, respectively. They were the Rose Smart Growth fund's first purchases, acquired in April 2006 for $23.l million.
Rose said at the time that the buildings' location a block from a downtown transit tunnel station was a big draw.
The Sightline Institute, a Northwest environmental think tank, has been a Vance Building tenant since 1994. Executive Director Alan Durning says the changes under Rose's ownership have been impressive.
To save energy, all the windows have been upgraded and now open and close. New valves on radiators allow tenants to control heat.
There's a new bicycle-storage room, and new showers. "It makes bicycle commuting a joy," Durning says. "I think they're doing a lot of the right stuff."
Other environmental groups have relocated to the Vance Building; Rose says it has become a "green hub." Ross Macfarlane, of Climate Solutions, which moved there in January 2008, says his group was attracted by the building's central location and green features.
Energy-efficient lighting has been installed in common areas. Old carpets that soiled easily have been removed, revealing original terrazzo floors that can be cleaned with soap and water, Rose says.
Individual offices are being upgraded as tenants come and go, he says: About 80,000 of the two buildings' 135,000 square feet have been retrofitted so far.
Since 2006 the buildings' electricity costs have declined 20 percent, Rose says. Steam-heat costs have dropped more than twice as much.
Rose says the buildings are 90 percent occupied, up from less than 75 percent. Rents have slipped with the recession, but still are above $20 per square foot per year, up from $16 to $18 when the fund bought the buildings.
And Rose says the fund's return to investors is likely to exceed the goals established in 2006.
Eric Pryne: 206-464-2231
Copyright © 2009 The Seattle Times Company
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