Kaiser Permanente pays over $36M for Yesler Terrace site

By BRIAN MILLER
Real Estate Editor

Rendering by Perkins and Will [enlarge]This perspective looks northwest at the planned medical building, with SHA’s planned new Sawara apartments at left.

As planned, Kaiser Permanente has paid a little over $36.2 million for the site of a new Yesler Terrace medical tower at 755 Alder St. The deal and planned building were announced almost exactly a year ago by the health care provider and Seattle Housing Authority. The land price was then estimated to be about $1 million higher.

King County recorded the sale last week; it was worth about $511 per square foot. SHA’s brokers were Frank Bosl, Jon Hallgrimson, Eli Hanacek and Kyle Yamamoto of CBRE. Kaiser Permanente’s broker was JLL.

The sloping corner site, at Ninth Avenue and just south of Harborview Medical Center, totals slightly over 1.6 acres. Perkins and Will is designing the nine-story building, which will have about 260,000 square feet of clinics, offices and labs. Kaiser says Mortenson will build the unnamed project, which it values at over $500 million.

Kaiser Permanente Washington COO Janet O’Hollaren said in a statement, “This strategic development furthers our mission of integrated care and meaningful partnership in our communities. Seattle Housing Authority has a thoughtful plan to invest in the Yesler neighborhood, and we’re pleased to contribute to the health of this evolving community.”

Regarding the Block 7.2 sale, SHA executive director Andrew Lofton said in a statement, “The presence of Kaiser Permanente as a health care provider, employer and Yesler community member is significant. They are exactly the type of partner SHA and the Citizen Review Committee envisioned when creating a master plan for a new Yesler that will enhance the lives of our residents and attract others to the community.”

Also notable in the ongoing, over $1.7 billion redevelopment of the 30-acre campus is that Kaiser represents the first non-apartment project. About 1,500 affordable and 2,500 market-rate units are in varying phases of development by Sustainable Living Innovations, Mack Real Estate Group, Vulcan Real Estate, Su Development, Lowe, Mill Creek Residential Trust and SHA itself. Soon there won’t be any more land left to sell and redevelop. The effort began in 2013, when the mostly 1940s-era complex had around 1,200 residents.

Coughlin Porter Lundeen, Mazzetti and Site Workshop are also working on the Kaiser project. It’ll also have about 810 parking stalls on six mostly underground levels.

Kaiser includes the Yesler Terrace project in what it calls a $1 billion initiative, announced four years ago, to expand its presence and deliver better health care in our state. As part of that same effort, Kaiser is also planning a new medical building in Everett, also announced a year ago, and expanding another next door.

The new four-story building, at 2929 Pine St. in the Riverside neighborhood, will have about 165,000 square feet. ZGF is the architect there. A new structured parking garage on the opposite side of the block, on Maple Street, will have about 750 stalls. The old Denny’s on Pacific Avenue and other old buildings will be removed. Last summer, the entire expansion/addition project received its SEPA determination of non-significance from the city. No start date has been announced, though Kaiser said 2022 was the goal for opening the facility.