June 7, 2017

More changes in store for Macy's and 300 Pine

Rendering by CallisonRTKL [enlarge]

Macy’s did not name the buyer, but Starwood Capital paid $65 million two years ago for floors five through eight, and is doing a major renovation to create office space.

The Cincinnati-based department store chain Macy's announced in its first quarter earnings report that it will sell two more floors in its downtown Seattle store at 300 Pine St. The deal is expected to close this fall.

Macy's did not name the buyer, but two years ago it sold floors five through eight to Starwood Capital of Greenwich, Connecticut for $65 million.

That 300,000-square-foot space — now called 300 Pine — is being entirely reconfigured by architect CallisonRTKL, contractor Bayley, and consulting engineers KPFF. Starwood hired the Colliers team of David Abbott, Greg Inglin and Laura Ford to market the space, which will have a large rooftop deck and amenities.

Queries to Starwood and Colliers were not returned.

Previously, Macy's was to continue operating on floors one through four, plus the basement. And shopping has not been interrupted during construction.

Now, however, store operations will shrink to the basement and the first two floors.

Macy's, like all traditional retailers, is facing stiff competition from Amazon and other online rivals. In its first quarter report, Macy's said that earnings and sales were down. Company CEO Jeff Gennette said, “In 2017, we are focused on taking actions to stabilize our brick and mortar business, including the testing and iteration of additional pilot programs in order to bring them to scale in future years. At the same time, we will invest to aggressively grow our digital and mobile business, while continuing the integration of our online and offline experience to allow our customers to shop the way they live.”

First quarter sales dipped 7.5 percent to $5.34 billion, compared to the first quarter of 2016. In the recent quarter, the company also reported a cash gain from closing a store in Minneapolis. During the same period it opened new stores in Los Angeles and Utah, and also announced future closings in Texas and Ohio.

300 Pine will gain about 160,000 square feet by adding two floors, which will also have to be renovated. This could make it more attractive to a large single tenant. Floor plates in the space are about 80,000 square feet, which the 300 Pine website said are the largest in the city.

The renovation has added two light shafts, or clerestories, that link and illuminate floors eight and seven. On a tour last year, Abbott told the DJC that a single tenant could also add internal stairs between floors, in addition to the elevators.

Located in the heart of the CBD, 300 Pine also boasts 15-foot ceilings, a new lobby with a coffee bar, and storage for over 90 bikes.

The dedicated business lobby, at the corner of Third Avenue and Pine, will be entirely separate from the store. Elevators will also be separate. Starwood has a long-term lease on Macy's parking garage, which is west across Third Avenue. Tenants and shoppers will be able to use the sixth-floor skybridge, with a keyed elevator to restrict access.

The building is directly on top of the downtown transit tunnel, giving it a transit score of 100 and a walking score of 99.