October 9, 2017

Hotel portion of F5 Tower for sale after SLS Seattle contract is ended

Rendering by Daniels Real Estate [enlarge]

The SLS Seattle hotel, designed by Philippe Starck, was expected to open this fall, with 189 rooms on floors three through 15.

Image from ZGF Architects [enlarge]

The nearly completed F5 Tower, at 801 Fifth Ave., won't have an SLS Seattle hotel, and the development team is seeking a new owner and operator for that portion of the complex.

Stockbridge Capital Group of San Francisco and Daniels Real Estate developed the 48-story tower, which was recently named for future office tenant F5 Networks.

Kevin Daniels confirmed the SLS Seattle news with the DJC. It was first reported Friday by Puget Sound Business Journal.

In a statement, Stockbridge's Terry Fancher said, “Given the significant strength of the Seattle hotel market, coupled with the strong investment market nationally for high-quality hotel assets, we have decided to pursue a sale of the hotel.”

PSBJ reported that Eastdil Secured will market the hotel space.

The SLS Seattle hotel, designed by Philippe Starck, had been expected to open this fall, with 189 rooms on floors three through 15. The lobby is on the 16th floor, next to a 200-seat restaurant created by James Beard Award-winning chef Jose Andres.

Plans for the hotel were announced in 2013, prior to construction, when the tower was still called The Mark. The tower topped out last fall.

The hotel was also supposed to incorporate the renovated former First United Methodist Church, now called the Sanctuary. That century-old structure has been converted into a restaurant, conference room, events space and ballroom. The events space was scheduled to open next month.

Los Angeles-based investor and hotelier Sam Nazarian, who owns the SLS brand, said in a statement, “As a cooperative hotel brand to our many great owners, we have mutually agreed to terminate our management contract.”

Nazarian and Stockbridge were partners on the SLS Las Vegas. SLS also currently has locations in Florida, Beverly Hills and the Bahamas. Other SLS hotels have been announced for Philadelphia, Atlanta, Washington, D.C. and Argentina.

The SLS Seattle page on the company's website has been replaced with a quote by James Joyce: “Mistakes are the portals of discovery.”

Earlier this year, Nazarian's company SBE announced it would merge with Hakkasan Group, another large, privately held hospitality company. Also this year, Stockbridge sold the SLS Las Vegas for an undisclosed amount. It had earlier acquired whole ownership from SBE in that troubled, eight-year $415 million conversion of the former Sahara Hotel.

Separately, the office portion of F5 Tower is expected to open in early 2019. Those 516,000 square feet are on floors 20 through 48.

F5 Networks will move about 4,400 employees into the tower from its space at the Elliott West office park.