August 17, 2022

Whole Pioneer Square building could be yours

Photo by Brian Miller [enlarge]

It’s handsome, vacant and steps to the streetcar, stadium district and ferry terminal.

It's not listed for sale, but it definitely needs a new tenant — or tenants. Galvanize is leaving the Heritage Building, at 111 S. Jackson St. in Pioneer Square. The tech, educational and co-working company had been the sole office tenant there since 2015. GeekWire first reported the news, via an email sent to customers who rent desks there. They'll be gone by month's end.

Broderick Group had said last month, in its second-quarter office report, that 111 Jackson had joined the sublease parade. It's also listing the entire five-story building, with about 70,599 square feet. That's available “immediately” through the end of January 2026. Rates aren't quoted for the “plug and play” opportunity. The brokers are Clayton Holm and Oscar Oliveira. The furniture left by Galvanize can be part of a potential lease deal, too.

The 111 Jackson sublease adds to Pioneer Square's glut of empty offices. Broderick puts the vacancy rate at over 21%.

The biggest sublease prize in the waterfront and Pioneer Square area remains the 186,806 square feet of the Maritime Building, which Big Fish vacated nearly two years ago, mid-pandemic.

Galvanize was acquired two years ago for $165 million by K12 Inc., which soon thereafter rebranded as Stride Learning. Its hybrid business model, including meetings and mentorships, was always a little fuzzy. But on the strength of its initial lease, then owner Brickman was able to sell the building to RREEF in 2015 for $34 million.

The 118-year-old corner building, at First Avenue South, was once home to NBBJ and later some offices for Microsoft. A partial seismic retrofit came in 2006. However, it remain on the city's dreaded roster of unreinforced masonry buildings, aka the URM list.

Originally a warehouse for Pope & Talbot, the famous timber dynasty, it's also been known as Western Dry Goods Building, Wax and Raine Building and Standard Brands Building, per city records. The conversion to offices was evidently in the late 1960s. The large roof deck, with panoramic views, and prominent rooftop greenhouse came under NBBJ's tenure, roughly 1984 to 2006.

Floor plates average around 13,000 square feet. If the building remains empty for long, it could represent that unicorn opportunity for office-to-residential conversion. But that would have to be under a different owner than RREEF, an arm of Deutsche Asset & Wealth Management, which is primarily an investor — not a developer.

The building also shares its block with the three-building RailSpur renovation project, owned by Manchester Capital Management. The latter's appetite for more risk in Pioneer Square is unclear.