Dive Brief:

• Last week, Seattle-based developer and investor Stream Real Estate acquired Queen Anne Plaza, a four-story office building in Seattle’s central business district, for $7 million with the intention of converting the property into apartments. Seattle-based entity East West Investment Co. Inc. was the seller, according to a press release shared with Multifamily Dive.
• Situated in the Lower Queen Anne neighborhood, Queen Anne Plaza is in the Seattle Center, a 74-acre area originally developed for the 1962 World’s Fair. It is also directly across from Climate Pledge Arena, home to the NHL’s Seattle Kraken and the WNBA’s Seattle Storm. 
• Queen Anne Plaza, originally constructed in 1985, sits on about 0.33 acres of land. The building consists of 52,270 square feet of office space and two levels of parking.

Dive Insight:

The ongoing trend of remote and hybrid work has driven down demand for office space, leading to smaller active offices and rising office vacancies, according to Chicago-based commercial real estate services firm Cushman & Wakefield, which advised the transaction. The Seattle central business district has a vacancy rate of 24.3% as of the third quarter of 2023, with 2.18 million square feet of occupancy losses through the first three quarters.

As a result, some office holders are looking to either sell or convert, said Brandon Burmeister, senior director of Cushman & Wakefield, said in the release.

“The impact of the pandemic on office occupancy and subsequent obsolescence phenomenon has led owners/investors to quickly re-evaluate their office assets and come up with new potential solutions to either attract tenants or, for lower-tier assets, to seek alternative uses as permitted by their city zoning/guidelines,” he said.

Details of the Queen Anne Plaza redevelopment have not yet been disclosed. However, Stream Real Estate intends to pursue LEED certification for the project, as it has with its previous projects.

The redevelopment plan is the first of its kind in Seattle since the start of the COVID-19 pandemic, according to the release. Queen Anne Plaza was considered an ideal prospect for multifamily conversion, as it was fully vacant, allowing the transition to occur more quickly, said Dan Chhan, managing director of Cushman & Wakefield, in the release. 

The building’s approximately 13,000-square-foot floor plates and abundant natural light were also a draw.

“It boasts a fantastic …  location near the arena and abundant amenities,” Chhan said, “while its upper floors also offer great views of Elliott Bay and the Puget Sound.”

Seattle and the surrounding area are home to multiple prominent Fortune 500 companies, including Amazon, Microsoft, Google, Apple, Meta, Nintendo, Starbucks and Nordstrom. This has resulted in a strong demand for residential development in the area. 

“Where viable, adaptive reuse of office buildings may help to serve the regional — and national — housing shortage while also avoiding potential overflow of derelict and vacant buildings in order to revitalize our cities and communities,” Burmeister said.