The 50-story downtown Seattle office building some call “the box the Space Needle came in” will soon sell to a Boston-based developer for nearly half a billion dollars.
Boston Properties announced Tuesday it plans to acquire the nearly 800,000-square-foot Safeco Plaza through a joint venture, with a gross purchase price of about $465 million. The sale has not yet been recorded online by King County.
Though pandemic-driven remote work has fueled existential debate about the future of downtown, Boston Properties CEO Owen Thomas on Tuesday called Seattle “one of the strongest office markets in the United States.” The company cited job growth in tech and life science industries.
Seattle’s office market took a severe hit during the pandemic. With many employers still mulling over how they will require employees to return to cubicles, those effects linger.
Vacancy rates are up and sales are sluggish in office buildings across the region, according to the commercial real estate firm Kidder Mathews. Demand is holding steady for new office buildings in Seattle and on the Eastside, primarily driven by tech companies, according to the report.
Another firm, CBRE, found downtown Seattle office rents are ticking up. “Listing agents are reporting higher asking rent and the tide of sublease space has likely peaked,” CBRE wrote.
Mayor Jenny Durkan, meanwhile, has been on a tour of events trying to draw people back to downtown as some candidates vying to replace her urge more focus on neighborhoods outside of downtown.
Boston Properties describes itself as the largest publicly traded developer, owner and manager of Class A office properties in the country.
The company said the deal for Safeco Plaza will be with “one of the participants in its recently announced Co-Investment Program.” Boston Properties plans to own up to a 51% interest.
Built in 1969, Safeco Plaza includes ground-floor retail and a 576-car garage underground. The tower was Seattle’s tallest from 1969 until 1985, when the Columbia Tower was built, according to HistoryLink.
Safeco Plaza is 90% leased with an average tenure of 17 years among the largest tenants, according to Boston Properties.
The latest sale price is $78 million more than the last time the building changed hands, bought by Korean investors in 2016.