Bids Due Next Week for Central Building

SEATTLE-Bids are due next week for the Central Building, 178,000-sf, eight-story building Downtown that was built at the start of the 20th century and is currently 75% leased to 43 tenants. The concrete-encased steel structure sits on one half of a block and was constructed to hold several additional floors. Local sources tell GlobeSt.com the well-located building should trade in the low $20-million range, which would translate to a cap rate in the 6% range.Meriwether Partners LLC is handling the disposition for a local partnership that includes the principals of GBS Real Estate and Martin Smith Inc. Meriwether’s Joel Aslanian declined to place a value on the property, but says he expects multiple offers on the property, which has 24,000 sf of retail space, 142,000 sf of office space and a 12,000-sf basement. “Interest is coming from a mix of well-capitalized local guys, some of whom are teaming with institutional partners,” says Aslanian. “It’s a pretty rare opportunity to pick up something right in the core of Downtown that has upside opportunity.”The property was developed by the Trust Co. of Seattle in 1907. The building was designed to be 15-stories and adorned with an elaborate clock tower, but given prevailing market conditions, the Trust Co. elected to stop at eight stories. Vertical expansion remains a possibility, but that’s the long-term upside. The short-term upside is in lease-up. Aslanian says the sellers have invested $5 million in the property. Improvements includes a new main entry/canopy, new retail storefronts, a renovated and expanded lobby and extensive renovation to the building’s terra cotta facade.The building’s four largest tenants have been in the building since the 1980s. The are the Defender Association (26,007 sf), Schroeter Goldmark (21,148 sf), Rite Aid (7,389 sf) and Kinkos (6,819 sf). The two office tenants are paying in the mid-to-high teens per sf per year, full service. The two retail tenants are paying in the low-to-mid $20s, triple net. The building has a good niche in the class B market, says Aslanian, “but it also has great potential for further renovation, expansion or even a longer-term change of use to hotel or residential.”