Hemmed in by Amazon, South Lake Union developer builds up, literally

They are, as the old saying goes, not making any more land, so what do you do with a tiny, hemmed-in building in one of the West Coast’s hottest real estate markets?

A Bellevue company has come up with the answer. It’s adding three floors to the 96-year-old South Lake Union building at 503 Westlake Avenue North and Republican Street where Antique Liquidators operated for many years until moving recently.

It’s the latest example of the dynamic growth that Vulcan Real Estate and Amazon.com have created in South Lake Union in general, and this part of the neighborhood in particular.

Recently, an old furniture showroom sold for 170 percent more than it did less than a decade ago. Now, next door, the Bellevue firm is planning to more than double the number of stories of Antique Liquidators’ former home.

Vulcan recently completed a new 395,000-square-foot office development for Amazon. That two-building complex occupies most of the block, and Amazon (NASDAQ: AMZN) leased the furniture showroom.

It’s unclear who, if anyone, has leased the soon-to-be-expanded Antique Liquidators building at 503 Westlake Ave. N.

“We are not able to name tenants at this time,” said Seth Startup of S.E. Grainger Development Group, the real estate development company that is buying and expanding the building. He did say that “interest [among tenants] has been unbelievably strong.” Commercial real estate brokers Nate Fliflet and Nick Carkonen with CBRE (NYSE: CBG) are the listing agents.

Late last month, S.E. Grainger applied to the city of Seattle for permits to add three floors of office to the two-story building. Part of the first floor will continue to be operated as retail space. Startup said construction will commence once his company gets the permits.

“We will be doing a true renovation of the existing building along with a vertical expansion embodying the historic character of the neighborhood,” said Startup, who said the cost of the project is unknown at this time and will depend on different factors, such as the interior improvements for tenants.

By rehabbing and refinishing the existing wood beams and floors, together with the restoration of the existing concrete walls and ceiling system, the project will emphasize the high ceilings and open space common to the architectural style of the early 20th century, Startup said. That’s also the type of space many tech companies seek out.

Two Seattle firms, Grace Architects and Pennon Construction, are designing and building the project.

S.E. Grainger, which has no outside investors on the development, still does not own the building. Startup said his company has been working on this deal for a few years and plans to finalize the property purchase this spring. He declined to provide the price.

Antique Liquidators, a family-owned business that has operated in South Lake Union for most of its 45 years, has moved to 1021 Sixth Ave. S., between the Chinatown/International District and Sodo neighborhoods.

“It was actually, I think, time for us to move on,” said Carl Smith, who owns the business with his wife Janice and son Mathew. He said all the growth in South Lake Union has made it hard to do business. Parking, for instance, is now more difficult to find.

“It’s nobody’s fault. That’s what happens,” Carl Smith said. “Neighborhoods change.”

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