Among the choice selection of addresses now tucked neatly back into Selig's holdings are the 40-story Class A downtown office tower known as 1000 Second Avenue, and the Fourth and Blanchard property in Belltown. Altogether, the commercial portfolio is estimated to contain 3 million sf of space.
For several weeks at least, local realtors amused themselves with speculation about what the Selig's properties would fetch in a shaky-legged economy and a Puget Sound office market that at last count was bloated on subleases. By most reports, Puget Sound was host to 3.7 million sf of subleases space as of the end of the third quarter—which contributed in no small part to an average 11.1 vacancy rate.
According to other news reports, Tim O'Keefe with Colliers International's Seattle office, Selig's broker, has acknowledged that timing played a part in the decision to keep the properties off the market for now. GlobeSt was unable to reach O'Keefe for comment by deadline.
GlobeSt sources are certain market timing made the decision. Among them is Craig Hill, VP of Grubb & Ellis' Bellevue office, who says of Selig's change of heart, "He knows the market is going to get better." Which, of course, translates to, "There's more money in it for he who waits for better times."
As for the state of the market, Hill tells GlobeSt.com, "I never felt the market was as terrible as many people were indicating." Not that Hill is unaware of how rough it has been. "Numbers don't lie," He says, "and there was about a 4-5 month period of time [last spring and summer] when the market was rapidly changing, and then 9-11 came along and caused things to really slow down." However, Hill says business has been picking up as of late—at least as far as leasing activity—and he thinks better times are on their way. It's just a matter of time.
As for the sales and investment side of Seattle properties, Hill says, "People that own real estate have been hanging onto it." Looking at the alternatives (i.e., the securities market), investors have been opting to stay in real estate.
Hill says recent asking prices have been hitting rather lofty heights. "There's not a lot on the market and what is out has been at pretty high prices." He cites an example of one competitor's listing out at a cap rate below 8. "I haven't seen that for years," says Hill. "But, if people can buy properties that are properly leased, and with interest rates being what they are, they can afford to pay a little higher price."
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