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New construction affirms city's economic growth

Chris Stephens

New buildings seem to be popping up all over town. They're physical proof of the strength of the Anchorage economy. New construction, particularly speculative construction, happens when an economy is growing, as ours is.

Let's run through the more significant commercial buildings under construction and then take a quick look back at 40 years of Midtown commercial development.

• The Three Cedars Office Building at 2701 Gambell St. is a twin to the 2700 Gambell Street Building, constructed about 10 years ago. Three Cedars is a speculative Class A office building. It will contain 35,000 square feet on three floors over a heated parking garage on the first floor. Construction is scheduled for completion this spring. The asking lease rate is $3 a square foot.

• The ReMax Dynamic Office Building is under construction on A Street just south of Wal-Mart. This 34,000-square-foot Class A building will have three floors. The building will be occupied by Dynamic Properties and ReMax Properties. Construction is scheduled for completion in November.

• Alaska USA Federal Credit Union is constructing a three-story, 30,000-square-foot building on B Street just north of Tudor Road. The first floor will consist of facilities management and warehouse space. The second and third floors will be Class A office space for Alaska USA's use.

• The new Anchorage Neighborhood Health Clinic is on C Street just north of International Airport Road. This building replaces the clinic's Fairview facility. The project is 43,000 square feet on three floors and will be ready for occupancy in August.

• Scheduled to break ground this spring is a speculative four-story, 84,000-square-foot Class A office building at C Street and International Airport Road, just south of the health clinic's new building. Completion is set for early 2013. The developer is JL Properties, which built several Class A office buildings during the last 10 years on C Street between 36th and 40th avenues.

In addition to these, a number of other commercial developments are under way. They include:

• A new 50,000-square-foot retail store for Alaska Industrial Hardware on the Old Seward Highway, just south of International Airport Road;

• Renovation of The Mall at Sears between Benson and Northern Lights boulevards;

• A 9,000-square-foot office building south of Klatt Road in South Anchorage for the construction services company STG; and

• A new 22,500-square-foot building for Verizon on 40th Avenue between the Old Seward Highway and Denali Street.

The Tikahtnu Commons shopping center continues to announce new stores, and construction continues for small commercial, medical, university and multi-unit residential buildings.

Now for some history. The first significant commercial development in Midtown occurred in 1971 when the Northrim Bank building was built on C Street. This building was constructed by what was then the Sohio Oil Co. for its own use. However, the development that established Midtown as a significant commercial area was construction in 1974 of the first of the two Calais Office Center buildings. They were speculative developments.

In the 1980s came a raft of buildings, including the Frontier Building, which was also a speculative project. A number of corporate headquarters buildings went up: Cook Inlet Regional Corp., First National Bank, Alaska USA and Wells Fargo Bank (actually constructed by its predecessor, National Bank of Alaska). The move by National Bank of Alaska, the state's largest bank at the time, from downtown to Midtown was significant.

In the first decade of this century, we experienced a surge of development with JL Properties projects on C Street. The JL buildings include Arctic Slope Regional Corp., Centerpoint, JL Tower and Centerpoint West.

Developments by Alaska Native corporations and others include 188 West Northern Lights, 2700 Gamble Street and a number of smaller Class A office buildings.

Now at the beginning of the second decade of the 21st century we are seeing continuation of that development. With the new construction this year, Midtown will have expanded 1.5 miles south to International Airport Road.

I wonder what development will occur, and where, during the next 40 years.

Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His column appears every month in the Daily News.


CHRIS STEPHENS
REAL ESTATE