Seattle’s 109-year-old landmark high-rise is for sale

SEATTLE — One of Seattle’s oldest skyscrapers is looking for a new owner.

Smith Tower is for sale at an unnamed price, according to a promotional flyer advertising the “investment offering” seen by The Seattle Times.

Eastdil Secured, the investment bank marketing the property, confirmed the building is for sale this week, but declined to comment further.

The flyer doesn’t list a specific asking price but raises the prospect of a deal: “Priced at a historically attractive basis, Smith Tower represents a unique opportunity to own a prominent piece of Seattle’s rich and storied history ... and its promising future.”

The listing also includes the two-story Florence Building next door, according to a person familiar with the process who was not authorized to speak publicly.

Smith Tower has changed hands many times in its 109-year existence. L.C. Smith, a businessman from New York who had worked making typewriters and guns, unveiled his plans for the tower in 1909, and his son later finished the project. When it opened in 1914, Smith Tower was among the country’s tallest buildings outside of New York. It drew 4,200 opening-day visitors to its 35th-floor observatory.

Today, visitors can take in sweeping views of downtown and Elliott Bay from a bar on the 35th floor and another lookout on the 22nd floor. The pyramid-shaped top of the building is home to a penthouse that’s among the city’s most expensive rentals. Other floors contain office and retail space, nearly half of which is empty today, according to the flyer.

The 35th floor observatory and bar would offer a new owner ongoing revenue, the flyer notes. But as the office market flounders, marketing materials hint at the potential for changing at least some of Smith Tower’s other uses.

The property comes with “ultimate business plan flexibility via potential for full or partial residential conversion in the future,” the flyer says.

Converting unused office space to apartments or condos has become a popular idea as the office market nationwide fails to fully rebound from the pandemic and cities look to revive their downtowns. More than 25% of office space in downtown Seattle was vacant or available to sublease in the second quarter of this year, compared with roughly 12% during the same quarter in 2019, according to the commercial real estate firm Colliers.

But conversions can be a challenge. Some buildings come with significant costs and hurdles, including a lack of enough windows. Even so, Smith Tower has been a candidate for conversion to housing before.

When Chicago-based investment firm Walton Street Capital bought Smith Tower and the Florence Building from the Seattle-based nonprofit organization Samis Foundation in 2006, the company planned to convert a portion of the tower to condos. But that proposal faded after the housing crisis of 2008. The building then began to lose office tenants. By 2012, Smith Tower was mostly empty, Walton Street had defaulted on its mortgage and the building was sold at a foreclosure auction. The building traded hands among various institutional investors twice more afterward.

Today, the building’s current owners, the Seattle-based development and investment firm Unico and Goldman Sachs Asset Management, are looking to offload the iconic tower as the office market stalls. The share of empty office space in Seattle is on the rise, curbing investors’ appetite.

“Many investors are taking a wait-and-see approach, while most sellers don’t want to sell under current conditions,” analysts from the commercial real estate firm Kidder Mathews wrote in a recent report.

Smith Tower last sold before the pandemic in early 2019 for nearly $138 million, according to county records. The tower is inside the Pioneer Square Preservation District, meaning most changes or remodeling would require advance approval from a neighborhood preservation board and the city.