There's a big hunk of prime property for sale in the north end Seattle's CBD. My back-of-the envelope analysis suggests that the assemblage is being offered as having potential for thirteen 50-story towers (or equivalent). I sure could be wrong. Go ahead and tear apart my analysis. But if I am correct (or nearly so) I wonder if Mayor Nickels and Councilmember Steinbrueck had 13 fifty-story towers in mind for this area?
For good reason David Brewster at Crosscut Seattle has been paying attention to a large assemblage owned by the Clise family in the north end of Seattle's downtown. The assemblage has significant development potential and Brewster has been trying to stretch the civic imagination — get people dreaming a bit — about how it might be developed. Since one of my favorite rules is to "do the math" at the outset of any real estate exercise, I start with some simple analysis — more arithmetic than math. The purpose is simply to see the implications of the numbers before I start dreaming.
• The Clise assemblage amount to 13 acres.
• This 13 acres of ground is spread over 7 full blocks and 6 partial blocks.
• In aggregate, the potential build-out is said by Mr. Clise to be some 13 million square feet (SF). (I assume that his number is based on informed analysis by architects or other real estate analysts familiar with the new zoning code.)
• The number bandied about for value of the assemblage is upwards of $1 billion dollars.
• The City of Seattle has just rezoned the area in which the Clise assemblage sits to 500 feet or about 50 stories.
• The blocks are not all of equal size, as this photo shows:
Copyright Seattle P-I
Those are the facts with which we have to start the analysis.
First let's ask if $1 billion is a plausible value?
We have 13 acres of land
One acre is 43,560 SF.
13 acres x 43,560 SF = 566,000 SF of ground.
Divide $1 billion by 566,000 SF and that works out to over $1,750/SF.
That seems like an extraordinarily high number on a square foot basis but I don't know the downtown land market so my opinion is worthless. Moreover, what is decisive in developer-driven valuations is the question "What can I do with the land? How much building can I build there?"
For real simple analysis, let's assume that the Clise assemblage will be developed as all-residential except for some arithmetically-insignificant street-level retail.
Mr. Clise is quoted as saying that upwards of 14 million SF could be built but let's stick with the 13 million figure for now as that is the most commonly-quoted number. (And what's a million among friends?)
For the sake of getting a very rough "order-of-magnitude," let's make some more assumptions.
The 13 acres are spread over 13 blocks. Assume that the blocks are all the same size. (Not so but this a back-of-the-envelope analysis and a block-by-block analysis is far too complicated for now.)
Assume that a typical urban "block" is somewhere around 210' x 210'. (It's actually a bit bigger but this is just to get a frame-of-reference.) That's 44,100 SF but close enough and just a bit over an acre. So 13 acres of Clise land equals about 13 blocks.
In order to build 13 million SF on 13 blocks you'd have 1 million SF per block.
One way to get 1 million SF on each block is to have to have a 140' x 145' tower (20,000 SF floor-plate) 50 stories high. (Btw, to be clear there are other models, too, of course: shorter buildings with a bigger footprint. I'm just looking at the obvious one.) Fifty stories high is a big building. For those of you who know Seattle, for comparison the WaMu Tower is about 900 thousand SF. And the WaMu Tower is generally regarded as a very big building. Not too big for its context but big.
Taking the analysis from another direction to see if the rumored/reported price makes sense. You have 13 million SF of building volume to work with. Assume that an apartment is 1 thousand SF (including common areas, elevator shafts, stairways etc). So 13 million divided by 1 thousand is 13 thousand apartments. One billion dollars for the land divided by 13 thousand apartments is some $77 thousand of land value per apartment, which from what I understand is not at all out of line for Seattle these days. So the bottom line is that paying $1 billion for land where you can build 13 thousand apartments may not be absurd, though I would think you'd have some deep discounts for a transaction of this size.
Put it another way — divide those 13 thousand apartments by those 13 blocks and you have 1 thousand apartments per block.
Of course the Clise Properties blocks in actuality are not all the same size so some blocks will have more and some less. But these seem to be the gross numbers for the whole assemblage.
Now I am not taking any position of whether this good, bad or indifferent. It may well be that I have made serious errors in my analysis and arithmetic. It may well be that 13 50-story buildings (or equivalent) in that area might create a great neighborhood. It may well be that the City's new Zoning Code creates so many requirements that the the theoretical maximum cannot be achieved or only achieved with a huge package of neighborhood "amenities." And of course such fantastic density would certainly put a lot of people on the sidewalks, which is essential for a safe, interesting and comfortable place.
I am simply curious about the numbers and I will let others either tell me that my analysis is all wrong and/or make judgments about the wisdom of such scale, bearing in mind that it is not only or even primarily the size of the building which makes the difference but how the building meets the sidewalk.