It is no secret that the commercial real estate market has been one of the biggest losers of the great recession. Seattle is no exception and as if to belabor the point, it has been reported this week that Beacon Capital Partners, the owner of Seattle’s icon skyscraper, the Columbia Center, missed its $1.65 million loan payment this month.
At 285 meters high the 76-story building formerly known as Bank of America Tower and Columbia-Seafirst Center (but long referred to by locals as Columbia Tower) not only looms large over the Seattle skyline but also carries the distinction of being the tallest building West of the Mississippi River by number of floors. However, bigger is not always better, as the Seattle Times reports that the tower is nearly forty percent vacant and Puget Sound Business Journal points out that the situation will only get worse as Amazon recently announced that it is taking its sizable ball (230,000 Square feet of leased office space in the tower) and going home, that is, to its new digs in South Lake Union courtesy of landlord Paul Allan. This comes on the heels of Columbia Center’s loss of one of its largest and oldest tenants a couple of years back, mega-firm K&L Gates (formerly Preston Gates and Ellis).
Although speculation is that the loan servicer will likely try to restructure Beacon’s loan, there appears to be little hope on the horizon in the near term for Seattle’s commercial real estate market, which of course means no new commercial construction is in the cards for the immediate future. (A brief look out this author’s window at the Seattle skyline confirms this assessment, revealing but one lonely crane on the horizon).
On the other hand, at least one brave developer is looking on the bright side, as Ed Hewson of HB Capital was quoted today in the Seattle Times saying: “Right now I can get great people to work on all the aspects of the project” in response to a report that HB Capital has filed a preliminary application for city approval of a 200 unit 17-story apartment building at Third Avenue and Cedar in Belltown. (Given the location of the proposed building, the developers should be further encouraged by the Seattle Police Department’s announcement last week that it will be increasing foot patrols in the area).