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Brian Miller
Real Estate Editor

September 30, 2021

On the Block: $11M deal breathes new life into a nearly dead downtown hotel

The almost century-old Hotel Seattle, at 315 Seneca St., has sold for just under $10.9 million, according to King County records. The buyers were three local LLCs associated with an investor group led by Curran Hagstrom, his brother Collin Hagstrom and Giovanni Napoli. Public records indicate a loan from Sound Community Bank.

“This is our first foray into hotel ownership,” says Curran Hagstrom. Accordingly, they've partnered with Weinstein AU and Columbia Hospitality — the same duo involved in the award-winning gut renovation and design of what's now the State Hotel, formerly the Eitel Building. The latter was landmarked, which is not the case for the Hotel Seattle, where Weinstein filed its early plan in June.

The new owners will rename the hotel, which they hope to reopen in 2024.

A straight renovation job with no change of use will likely not require design review. (The State/Eitel was basically disassembled behind its crumbling facade, with new structural supports built within.)

Photo by Brian Miller [enlarge]
Better days lie ahead for the old and somewhat derelict hotel, which awaits some TLC before hosting new guests in 2024.

The seller was Heart of Seattle, associated with the Neyhart family, which acquired the 78-room hotel circa 1977 for an unknown amount. It was then known as the Heart of Seattle Hotel. It opened in 1926 as the Continental Hotel.

Dylan Simon, Jerrid Anderson and Brandon Lawler of Kidder Mathews represented the family. The deal was nominally worth about $139,102 per room. That figure excludes the retail and restaurant space — the latter once occupied by Bernard's, the basement dive bar. The nail salon still seems to be operating. The 11-story building has 36,240 square feet, which equates to about $300 per square foot.

KM put the building on the market this spring; it had closed earlier during the pandemic. Offers were due in April. There was an early renovation plan about that time from Graham Baba Architects for prospective buyer ASH NYC, which was evidently outbid by the local group.

The hotel is between Fourth and Third avenues, and a few steps from University Street Station. It's operated in recent years as a budget operation, and is in somewhat shabby condition. The four concrete entry canopies were added circa 1962.

The new owners are experienced multifamily investors who also happen to be well-known brokers — for Westlake Associates and Institutional Property Advisors. (Those firms had no role in the hotel deal.)

No contractor has been selected yet, says Curran Hagstrom, who calls the property “an historic but currently tired building, with a ton of character and charm.”

He continues, “At first we were somewhat dismissive of it,” given the hotel's condition and the partners' past experience in multifamily, not hospitality. At the same time, he says, the partners had plenty of experience fixing up old apartment buildings from the 1920s, so they weren't daunted by the prospect of a major renovation. “We've absolutely familiar with tackling old buildings and rehabbing them. We'll give it some TLC.”

And when it comes to a new hospitality venture, “We're intentionally going in with a humble mindset. We know what we know, and we know what we don't know.” That's where Columbia Hospitality comes in.

Also, the partners liked “the opportunity to make a mark in downtown Seattle,” particularly when it — and hospitality in particular — has been so badly battered by the pandemic. “COVID's not going away, but at some point the pandemic will.” And tourists will return to downtown, we hope.

“We do plan to designate it as a landmark,” he says of the hotel. (BOLA Architecture + Planning will consult on that.) Whether that comes before or after the renovation is still TBD; Weinstein will likely decide that strategy — and what to do with the awful '60s addition to the lower facade.

Touring the building “was like stepping back in a time machine,” says Hagstrom. Employee timecards remained in their slots, waiting to be punched. The vending machines were still stocked with stale candy. There were napkins and placemats on the tables at Bernard's, along with dusty sauerkraut dispensers awaiting the ghosts of patrons past.

And what of Bernard's? Hagstrom has eaten there, but has no fond memories of that “dungeon,” a widely shared sentiment. He anticipates that space, as with the State Hotel, will probably flip to back-of-house operations, maybe a gym, etc. Instead, as Weinstein did at the State, the lobby could be opened up with a bar and restaurant to invite people in.

In a sense, the hotel was “frozen in time” — per Hagstrom — well before the pandemic. After four decades of neglect, it'll reawaken in a new century.

Got a tip? Contact DJC real estate editor Brian Miller at brian.miller@djc.com or call him at (206) 219-6517.

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