Shaping the lay of the land
Seattle Times business reporter
Ada Healey's job boils down to this: Turn 50 acres in South Lake Union into a money-maker for one of the richest men in the world, and do it during the worst commercial real-estate market in a decade.
It's a challenge, to say the least.
But Paul Allen — the billionaire who gave Seattle the unconventional Experience Music Project — didn't turn to a swaggering risk-taker to be a new vice president of real estate for Vulcan last year. He chose Healey, a little-known but highly respected outsider who built her reputation managing mall investments for a risk-adverse pension fund.
"She is certainly no gunslinger," said Hans Kemp, real-estate broker at the Staubach Company who represents bio-technology companies. "She's a little more by the book, and I mean that in a good way."
A native of Atlanta, Healey, 40, is still getting to know the local companies and national trusts that control much of Seattle's commercial real-estate market. The deals she cuts in the coming months will help define an entire neighborhood in the heart of the city for the next century and beyond.
By all accounts, Healey's arrival at Vulcan last November marked a big shift in the company's approach to real estate. Under Larry Martin, the former vice president, Vulcan had a seemingly insatiable appetite for property, especially in South Lake Union, where the company took control of more than 94 parcels of property since 1994.
"Vulcan wanted somebody to run their real estate in a traditional fashion, which means looking at the economics and asking if a project makes sense," said developer Gary Carpenter, an executive with Bentall. "I think (Healey) will put her arms around the real estate, get it organized and make sure it stands the basic test of real estate — whether it makes money."
Little change to holdings so far
Collecting property is one thing, but building on it is another, and little in the South Lake Union landscape of low-slung office buildings, old warehouses and low-cost housing has changed as Vulcan has expanded its holdings.
That is no longer the case. The company has two office and laboratory projects under construction — one for pharmaceutical giant Merck and the other for the Seattle Biomedical Research Institute. It expects to break ground on a 160-unit apartment building on Minor Avenue by the end of the year.
By early next year, Vulcan hopes to start work on 2200 Westlake, the office, retail and condo project to be anchored by QFC. Two other developments are permitted and ready to go, waiting only for a major tenant. Sources say Vulcan is close to finalizing a deal to convert the former Washington Natural Gas building on Mercer Street into research space for the University of Washington.
As the number of projects has grown, so has the office. Healey has hired 11 new staff members. The company has formed partnerships with local developers, such as Harbor Properties and Schnitzer Northwest.
Healey figures it will take 10 to 15 years to build out all the land Vulcan owns in South Lake Union. She made it clear that the period of grabbing up property is over.
"Having land holdings is actually probably not a bad investment given what has happened in the equities market in recent years," she said. "However, my charge is to take our land holdings and turn them into income-producing property, and we are going to do that thoughtfully and with the appropriate amount of financial discipline."
Prefers safe bets
It's not surprising that Healey prefers safe bets. Her real-estate career began as the industry underwent a fundamental transformation following the bust of the late 1980s when developers overbuilt the nation's office market. Since then, the business has become dominated by more conservative institutional investors and real-estate investment trusts.
Healey, who played basketball for Duke University and got her master's in business administration from New York University, started in the insurance business before making the switch to real estate and joining NYNEX Properties in 1988.
She joined Clarion Partners in 1992 and began working with one of the company's biggest clients, the New York State Common Retirement Fund. In 1995, she helped bring the fund together with General Growth Properties in a successful bid to buy Homart Development, the shopping mall arm of Sears, Roebuck & Co.
At the time, the $1.8 billion deal was one of the largest real-estate acquisitions, recalled John Bucksbaum, General Growth's chief executive.
"She always respected our entrepreneurial bent but never lost sight of her professional responsibilities," Bucksbaum said. "And you know, the (New York) state retirement fund happens to be a bit conservative."
In public scrutiny
Although a proven behind-the-scenes player, Healey's bigger challenge may come as more public scrutiny is focused on Vulcan's South Lake Union developments. The company recently faced protests by a small but determined group of activists over demolition of the low-income Lillian Apartments, and their complaints have found sympathetic ears on the Seattle City Council.
In an industry known for gossip and gadflies, Healey is guarded when it comes to real-estate plans. That same reticence extends to the internal workings of Vulcan, an organization with a reputation for managing information and keeping plans close to the chest. What role does Allen play?
"It'd be hard for me to answer that question, I think," Healey said. "We have an investment process that we go through, and we like to keep that within Vulcan."
During a recent interview, Healey was surrounded by renderings of buildings that have been proposed or are under construction in the area, but she is mum about what the company plans to do with much of the specific properties.
Just don't expect it to look like the Seattle Commons, the Allen-backed master-planned neighborhood in South Lake Union that voters twice rejected in the 1990s.
"I don't know exactly what the Commons entailed," she said. "I couldn't even tell you where the files for the Commons are."
J. Martin McOmber: 206-464-2022 or firstname.lastname@example.org