With a vacancy rate of 21 percent, Pioneer Square has the biggest chunk of empty office space in downtown Seattle.
Starbucks closed a $125 million deal Monday with real-estate investment firm Spear Street Capital for two office buildings in Pioneer Square.
The connected buildings, at 505 First Avenue and 83 South King Street, are about 70 percent leased and had been on the market since May, said Stacey Krum, spokeswoman for Starbucks.
Anchor tenants include data-storage company Isilon Systems, brokerage company Sharebuilder and Nuance Communications, a speech and imaging software firm.
Starbucks purchased the King Street building in 2006 for $28.7 million and began building the seven-story First Avenue building in 2007 — when it was opening seven stores a day. A year later when the recession hit, it decided it wouldn’t need the space and began looking for tenants to lease the offices to.
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John Grassi, president of San Francisco-based Spear Street Capital, said the company was attracted to the investment because of the neighborhood’s historic charm and its location — between the viaduct and CenturyLink Field. He said he expects tenants to be a mix of technology, media and traditional companies.
With a vacancy rate of 21 percent, Pioneer Square has the biggest chunk of empty office space in downtown Seattle, according to Officespace.com. Rent averages about $24 per square foot — $3 less than downtown’s average and the second-lowest behind Queen Anne and Magnolia.
John Heimbigner, regional director for the online real-estate database, said the space emptied by Amazon.com and the Walt Disney Internet Group make up about 60 percent of Pioneer Square’s office vacancy. Heimbigner said the area is “turning for the better but has a long way to go” before it recovers.
Christine Harvey: 206-464-3263 or firstname.lastname@example.org