October 1, 2019

Starwood files early plan for lower floors at downtown Macy's, with no tenant announced

Image by CallisonRTKL [enlarge]

In recent years Starwood Capital Group acquired the top six floors of Macy’s downtown Seattle building and converted them to office space, now leased by Amazon.

Come February, Macy's will shutter its iconic downtown store at 300 Pine St., as The Seattle Times first reported over the weekend. Employees were informed on Friday, and Macy's confirmed those plans with the Times.

Amazon now leases the top six floors of the building, which it calls BlueShift. Its landlord is Starwood Capital Group, which between 2015-2017 spent $115 million to buy those floors, then invested more to convert them to office space. The project was then called 300 Pine; CallisonRTKL was the architect.

So what happens next to the basement and first and second floors? Macy's told the Times it would sell, without naming the buyer.

In August and September, before the Times report, Starwood and CallisonRTKL filed plans for nonstructural demolition and re-tenanting on those three floors. No tenant is mentioned. The plan is labeled “300 Pine Phase 3.”

Two years ago, per public records, Starwood signed a right of first offer agreement (or ROFO) with Macy's to buy the bottom three floors of the building. No dollar amount is specified in that agreement, which came a month before the Amazon lease.

On the new demolition plan, the same prior team members Bayley Construction and KPFF are also listed. It also includes the sub-basement and a small first-floor mezzanine. Excluding the sub-basement, that could potentially add about 225,000 square feet to the roughly 450,000 square feet Amazon now leases above.

When it was brokering the space three years ago for Starwood, Colliers estimated that each renovated floor could accommodate around 500 workers — or potentially 3,000 on six floors. Floor plates in the building average about 80,000 square feet.

CallisonRTKL's many upgrades to the building include a roof deck, internal stairs and dramatic, two-level light shafts (clerestories) extending down from the roof to the seventh floor. It also connects via a skybridge to the structured parking garage on the west side of Third; Starwood has a long-term lease for that.

Some of the ground floor and basement could potentially be preserved as retail. There are now a Victrola coffee shop and beauty school on two corners of the building. And Amazon has been venturing into brick-and-mortar retail operations, including AmazonFresh and Amazon Go.

The landmarked full-block building was developed for the Bon Marche in 1929, with an addition in the 1950s. (The architect was John Graham, Sr.) The Bon sold in 1992 to Federated Department Stores of Cincinnati. The Bon name was gradually phased out by 2005. Federated later renamed itself Macy's. The building signage is likely to change again.

Nationally, Macy's and other traditional retailers have been closing stores and struggling to compete with Amazon and other online rivals. In our region, Macy's recently closed stores in Northgate and Redmond Town Center. Its slightly out-of-date website still lists the latter among one dozen Puget Sound locations, which include Bellevue Square.

The company announced in May that it would close 13 stores this year; the downtown Seattle store wasn't on that list. That followed the 2016 announcement that it would close 100 stores in the years ahead.

Macy's operates about 690 stores under different brands, including Bloomingdale's. Its next quarterly report comes on Nov. 21, when other store closures could be announced or confirmed.