February 13, 2017

SkB sells its Belltown building for $14.3M

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SkB bought the building five years ago for $3.65 million.

Eleven years ago, SkB Architects began leasing a building in Belltown at 2333 Third Ave. Six years later, using an LLC, it bought the property, at the southwest corner of Third and Battery, for $3.65 million.

The deal for the former bank — constructed in 1951 — also included a small parking lot and a retail building to the south.

Now the entire 16,000-square-foot site has sold for $14.3 million, according to King County records. That's an increase from $225 to $882 per square foot.

Why such a big appreciation in just five years? Has the property really gained 300 percent in value?

CBRE's Nick Carkonen helped sell the building to SkB five years ago. He was not involved in this recent sale, but called the price “incredible. That's a big number. It's a testament to our market and the amount of investors willing to buy into our market.”

He also cited the lot's corner position as being particularly desirable to developers.

Buyers are paying more per square foot along Fifth Avenue and the Denny Triangle, but the zoning there allows taller structures.

Ava Bao of CB Commercial Realty represented the party behind Hot Rain LLC in negotiations with the seller. Christopher Secreto and Leroy Lutu in Marcus & Millichap’s Seattle office represented the seller.

(Editor's note: This story has been changed to add the seller's representatives.)

SkB declined to comment on the sale or where it might be moving. It now has over $10 million to invest in a possible new headquarters.

The firm did a major renovation of the bank building after its 2012 purchase.

Along with the recent sale, public records show that SkB terminated its 25-year lease with the ownership LLC, whose governors are the firm's five principals.

The buyer of 2333 Third was Hot Rain LLC, which is associated with Seattle investors Hao Chen and Hongbin Zhang. In addition to Hot Rain, they're listed as members of another LLC that in September paid $6.7 million for a smaller site at 55 Bell St.

Early plans filed with the city for 55 Bell describe an apartment building to be constructed within five feet of the Alaskan Way Viaduct, which is at the north edge of the property. For now, that site remains a parking lot, with no further plans filed with the city.

No plans have been filed for 2333 Third. That strip of Belltown is zoned for residential towers up to 125 feet and commercial towers up to 65 feet. Planned nearby are a 12-story apartment building at 2401 Third and a nine-story apartment building at 307 Broad St.

Many blocks on Third still have surface parking lots and older, low-rise structures that could be demolished.

Founded in 1999, SkB's current projects include the Washington State Employees Credit Union building in the U District, Park 12 townhouses in Bellevue, and renovation and expansion of Bleitz funeral home on north Queen Anne into office space.