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Unico Properties Sells Smith Tower and Florence Building in Seattle to Goldman Sachs Affiliate for $138MM

Seattle, Unico Properties, AEW Capital Management, South Lake Union, Butler Garage, Pioneer Square, Grand Central Block redevelopment
Image courtesy of Unico Properties

By Jack Stubbs

In a recently-recorded transaction, Seattle-based Unico Properties sold two assets in Pioneer Square—the iconic Smith Tower and the adjacent Florence Building—to an affiliate of Goldman Sachs for a combined $138 million, according to public records filed with King County.

The sale of the Florence Building and Smith Tower occurred as part of several other Seattle transactions worth a combined $322.5 million that have so far been recorded.

According to a statement released by Unico Properties, the sale of the various Seattle properties were part of a larger 27-building, 1.8 million square foot portfolio of assets located in Seattle and Denver. The portfolio of properties, which are collectively referred to as the Unico Partners I portfolio, is worth a combined $710 million, according to Unico’s statement.

Unico will retain a stake in the portfolio and will continue to operate and manage the buildings on behalf of the new partnership. The transaction signals the successful conclusion of Unico’s first institutional discretionary fund Unico Partners I, which closed in 2014 after raising $265 million in equity from U.S. and Canadian institutional investors, according to the company’s statement.

“Since 2014, Unico has repositioned these properties through targeted capital investment and major leasing. Several properties in the portfolio underwent significant transformation including several historic properties and the delivery of an award-winning new construction,” said Unico President Jonas Sylvester. “We’ve not only enhanced our properties and achieved strong returns for our investors, but also improved our cities’ built environments and enhanced the quality of life for our tenants and communities.”

The latest recorded sale for $138 million comprises two assets, the 4,400 square foot Florence Building located at 512 Second Ave. and the historic Smith Tower office property in Pioneer Square. The approximately 37-story, 260,000 square foot Smith Tower was originally built in 1912.

Along with the recent sale of Smith Tower and the Florence Building, there have been several other transactions recorded over the last several days.

One sale included three separate assets that traded for a combined $116 million, which are located at 301 and 325 Eastlake Ave. E. in Seattle’s South Lake Union neighborhood. The first building is the 51,600 square foot Evergreen Bank and Pemco Financial Services Building, a four-story structure that was built in 1973, according to public documents. The second building is the 10-story Pemco Parking Garage, which was built in 1981 and totals 116,178 square feet. The $116 million transaction also included the Yale and Thomas Building office building, which is the former Pemco Headquarters.

The Yale and Thomas project on the edge of South Lake Union, located at 325 Eastlake Ave. E., is a 168,260 square foot Class A office development, according to Unico Properties’ web site. Built in 1981 and redesigned in 2016, the five-story building features efficient and open floor-plates.

The three other properties in the transaction included three historic assets in Pioneer Square: the Grand Central Building located at 222 First Ave. S., which sold for $27.2 million; the Butler Parking Garage located at 601 2nd Ave., which sold for $31 million; and the Buttnick Building at 202 First Ave. S., which sold for $10.3 million.

The Grand Central, City Loan and Buttnick Buildings are historic three- and four-story brick buildings that comprise and entire half block in Pioneer Square and are part of Unico Properties’ 116,335 square foot Grand Central Block mixed-use redevelopment, according to the company’s web site.

Pioneer Square is the oldest neighborhood in Seattle, and the Grand Central Block project will look to capitalize on the historic fabric of the neighborhood just south of the city’s downtown core. “The Grand Central Block historic rehabilitation is in pre-design and preservation review, and has three primary goals: to activate the square, to rehabilitate the buildings, and to adapt the uses,” Unico’s web site states.

The project is managed by Unico Properties and Graham Baba Architects, and includes participation from nearly 40 neighborhood and city institutions.

The latest chapter in the Grand Central Block redevelopment and the Yale and Thomas project in South Lake Union comes several months after Unico Properties made another significant splash in the Seattle market. In mid-July, the company in partnership with AEW Capital Management spent a combined $359 million to acquire two office buildings in downtown Seattle, located at 1111 Third and 2nd and Spring.