Unico Properties announced on Wednesday that it will be renovating the 35th floor of the iconic Smith Tower, Seattle’s oldest skyscraper located in the Pioneer Square neighborhood, in a multimillion-dollar project that will share the building’s history with the city. The grand opening is scheduled for August, with a date that has yet to be determined.
The renovation will include tours that will bring its guests back into the Roaring Twenties. It will also involve adding a Prohibition-inspired cafe and bar on the 35th floor, as well as a curated general store on the ground floor. The Chinese Room, also under renovation, has a wraparound public observation deck that can be rented for public events. The furniture and the hand-carved ceiling were gifts from the Empress of China, Cixi.
“This project is a meaningful nod to the neighborhood, I think it’s a terrific idea.”
“Unico Properties has been on fire as they continue acquiring property throughout the region,” said Stephen Cugier, a vice president for Orion Commercial Properties LLC, a commercial brokerage firm in Seattle. “Their portfolio is performing extremely well and is highly stable. I think when you own an asset like the Smith Tower, you take on a little bit of responsibility for acknowledging the significance of that building in Seattle’s history. This project is a meaningful nod to the neighborhood, I think it’s a terrific idea.”
According to Cugier, the former owner of the 270,000-square-foot office tower, located at 506 2nd Ave., wanted to turn it into condos. After Walton Street Capital acquired the building in 2006, it did not renew leases with its current tenants, which nearly emptied the building right before the market crashed, says Cugier. In 2012, the property was sold at a public foreclosure auction and re-stabilized by attracting new tenants. When Unico Properties acquired the tower in 2015, the vacancy rate dropped even further from 35 to 15 percent.
Scott Brucker, a senior asset manager for Unico Properties, said in a prepared statement that the firm saw Smith Tower as the perfect opportunity to preserve and energize a historic landmark in Pioneer Square. “We are honored to enhance its reputation as a premier city landmark and excited to offer tourists, tenants and visitors an unparalleled and fully immersive experience, introducing them to a Smith Tower like they’ve never seen before.”
Pioneer Square offers an active market that sits below three percent office vacancy rate, compared to downtown Seattle’s 7.3 percent, according to JLL’s 2016 First Quarter Office Statistics report. The neighborhood’s appeal for many office tenants is working in a vintage building, even though some areas are rough around the edges due to local programs for the homeless and those in need, says Cugier.
“I think the explosion of the tech sector and the many start-ups in the area, helped to stabilize the submarket. It’s become difficult to find space, but I think we’re going to continue to see people that want to work there,” he added. According to Cugier the area has seen growth in rental rates over the last year. JLL’s report states that Pioneer Square’s average asking rent is $30.60 per square foot, however, Cugier says some spaces are leasing at a rate of $38. Compared to the asking rate of $24 a few years ago, this increase is certainly significant.