August 13, 2015

Tenants must leave Maritime Building so new owner can do major upgrade

Photo by Ben Minnick [enlarge]

The reinforced concrete structure has 145,000 square feet and is home to many creative firms.

The new owner of the Maritime Building at 911 Western Ave. near Pioneer Square has told tenants they must leave because it is going to do a full renovation of the 1910 structure.

Beacon Capital Partners recently sent a letter to tenants saying the goal is to bring the five-story office building's fire-life-safety standards up to industry code.

“It's a terrific property with a very exciting future, but the Maritime Building requires — and deserves — a full-scale improvement,” the letter from Andy Wattula, a Beacon senior vice president, states.

Construction will begin no sooner than March 2016, he wrote, and take more than a year.

In June, an entity related to Beacon bought the building from Maritime Corp. for $13.1 million. The reinforced concrete structure now has 145,000 rentable square feet, with views of Elliott Bay on the upper floors — views that improve after demolition of the Alaskan Way Viaduct.

Beacon is one of several companies to buy property along the waterfront in anticipation of the more than $1 billion redevelopment that the city is planning.

Natalie Price, a spokeswoman for Beacon, said the Boston-based company intends to reposition the Maritime Building as modern Class A office space.

She said all systems will be upgraded, as required by the city with such a renovation.

“It is so invasive: They'll literally touch every system in the building,” she said, adding it would be “pretty miserable to try to operate your business through.”

Price said Beacon is giving tenants time to find alternative space, and finalizing a transition package that includes referrals to real estate brokers, moving companies that will offer discounted rates and various concessions depending on lease status to help with the transition costs.

She said Beacon is working on agreements with tenants that have ongoing leases without a termination clause.

The property is zoned for construction to 160 feet, according to King County records.

Beacon has not devised an exact renovation plan yet, Price said, including whether they will expand the structure.

“It's got great bones. It's a beautiful building,” she said.

It was designed by architect E.W. Houghton and was originally known as the Pacific Warehouse Building, according to information filed with the city's Landmarks Preservation Board. It was sold to the Maritime Corporation in 1942, and has housed everything from industrial businesses to professional offices.

The landmarks board denied a request in 2009 to designate it a city landmark.

The building is now home to many creative firms, including architecture, interior design, media and Internet companies.

According to OfficeSpace.com, about 9,200 square feet are vacant, with lease rates from $18 to $22 per square foot.

Elm Environments, a landscape architecture, planning and architecture firm, began leasing 1,650 square feet there in April of 2011, and signed a three-year renewal in April 2014, said Principal Christopher Overdorf. However, according to a clause in the lease, the landlord must only give three months notice to vacate if it plans a major renovation.

Overdorf said Elm wants to lease 3,000 square feet in the Pioneer Square or Sodo neighborhoods, but finding that is not easy.

“Rates are so much higher and that sort of raw creative space — a lot of those spaces — are getting redeveloped,” he said, “so the lease rates are going way up.”

Overdorf said Elm is working on a transition plan with Unico Properties, which manages the Maritime Building for Beacon.

Driscoll Robbins operates Driscoll Robbins Fine Carpets in the Maritime Building. The business sells hand woven decorative rugs, and has been on Western Avenue for 18 years.

Robbins said it moved from the National Building 2.5 years ago because it needed more room and admired the Maritime Building. The company did a huge remodel and intended to re-sign for another five years when Robbins found out Beacon bought the building from a story in the DJC, he said.

He said he has an option to renew for another five years, and will talk with the landlord next week to see what they propose.

Driscoll Robbins' customers are interior designers, architects and people who buy high-end retail, so the business is not dependent on walk-ins.

Robbins said he is thinking about moving out of the downtown core because of traffic and construction, but there are not a lot of great options: “Maybe Sodo or Georgetown.”

One tenant who has rented in the building for a long time (and did not want to be quoted by name) said they likely would either work out of their home or set up shop in the suburbs because of the limited availability of affordable space downtown.

They said it's sad to be leaving the old building, but they are glad it will get a seismic upgrade. Given all the new development, “It's nice they are keeping an older building.”