Columbia Center Owners Miss Mortgage Payment

And the people that build those spaces are out of work in very high numbers.

I wish this was an unusual story, but you can see this on every scale all over the city, all the way down to vacant lots with aging proposed land use signs.

tear it down. It's a shoddily built eyesore.

Not really.

not sure why there’s surprise at prices going up and down.

the entity is an llc, the lender knows the risk, and charged for it, the parties will work it out …or foreclose…or short sell…or forgive…..

everything’s changing all the time, and everything’s renegotiated all the time, welcome to the world called a marketplace……………your profit is not guaranteed, big duh.

yes, really. Tear it down. Tear down the Rainier Tower too, while we're at it, before it falls over and crushes the Olympic Hotel.

For better or worse the Rainier Tower is likely to survive an earthquake that would leave the Olympic Hotel as a pile of rubble.

Downtown commercial vacancy rates are insane. Supposedly the average is still around 25%, but many buildings like the Columbia Center are much higher. In addition many companies have space they are paying rent on but aren't actually using. They aren't sub-leasing it because there is no market at the moment. The real office vacancy rate downtown is likely much higher than what is being reported.

Furthermore many of the jobs in the financial sector that used to fill much of the downtown office space are likely gone forever. Even if the activity level goes back to what it once was, the jobs will be in New York, New Jersey, Charlotte, or Bangalore.

Yep. Decent discussion of walkaway corps here: Tishman Speyer Walked Away From Its Stuyvesant Town, Peter Cooper Village Mortgage. Why Can't You?

Personally I think this is too big a crisis to waste. A lot of skyscrapers have now-outdated wiring and are not particularly efficient. 38% vacancy? Sounds like time for a full renovation, which means jobs now and it'll be a better place to work when the economy comes back.

Isn't it marvelous? When Beacon bought the CC in what was basically a flip, some though it marked the peak in commercial RE. We settled in to wait for the joke to play out, and here we have it….

There is supposedly 7+ million sqft available in the downtown core and
some fringe areas. That's about 7 skyscrappers of space.
This is just office space. Multi-family is hurting also.
Marginal CRE in Seattle is going to get hammered. The flip side is
that there are folks cash waiting to pick up some bargain

I think that you hit on something about jobs: No jobs, no need for
office space. The FIRE cluster is dead in Seattle (Russell isn't enough)
with the death of WAMU, Safeco, and others. (FIRE = Finance, Insurance, Real Estate). The DSA and Chamber are crapping
their pants about this situation. City Council is relatively clueless on
what is going on. They are starting to get it, but not really. Come on,
council staff, do some homework.
Mayor McGinn is the only one who really gets what is going on, although I don't agree with him on many issues.
Sky isn' falling, but it is going to be a very hard 3+ years for CRE.

I can't help blaming Bellevue for part of this. Yes, the economic collapse removed quite a few tenants. But at the same time Bellevue has been trying to lure businesses east with blocks and blocks of new cheap office towers. It feels like Bellevue is to office space what Phoenix is to housing: speculator-driven sprawl, now sitting empty.

(though I admit I don't have numbers on Bellevue's new vacancy rates)

At least the Seattle vacancy is in a high rise and not in sprawl as in Detroit; where the mayor is looking at demolishing huge sections of the city in order to save the whole. It doesn't look good – 40% vacancy in the tallest building of Seattle. Ouch.

In NYC's old financial district, buildings with long-vacant commercial space were converted to condos and apartments. Expensive – and pre-real estate bubble burst, I acknowledge – but could this be a possibility for some downtown Seattle commercial space?

That's actually not a terrible idea. We want density, so we want skyscrapers. But the sprawled low-rise offices are still around throughout the region (likely with equal or greater vacancy rates). Is it time to start demoing or converting these low-rise offices out in the suburbs? That will drive down vacancy rates in the city.

And sorry I'm hard on Bellevue. I appreciate that their tall buildings are much better than further-out suburb offices. But they make it cheaper and easier for people to live far into the exurbs and commute by car – all things that are bad for our region and our world. Plus they've built their city in car-only mode, and it feels strange to walk on the streets.

I believe that we a not seeing the whole picture. The problem stems back to Corporate and Bank greed. Outsourcing jobs to 3rd World countries and buying labor at 10 cents on the dollar. Replacing basic positions to machines and eliminating personnel. Irresponsible financing. We have put our people out of work that would fill those building. Uncontrolled buyouts for higher profits by a few has penalized many. Hense empty buildings and unemployment that once supported our ecomony.

Here's my 'redirected' post from your stupid “Seattle Center Grid” piece which is having problems:

Dan. As if your parking garage museum idea for Portland's Memorial Coliseum wasn't bad enough (I voted it Worst of Show), now you think running streets through Seattle Center grounds is a good idea. Are you nuts?

A grand Chiluly art structure would match EMP very well and a gallery would be a popular attraction alongside the Space Needle. My beef with the design is that Fun Warehouse 'footprint' is too big already and making it larger worsens the problems of visibility and access.

So, I recommend a taller building with a smaller footprint, 3-stories w/ basement, all sides with glass views. Assign the Chiluly Gallery to the top floor; 2nd floor for kids amusements and games plus food court; 1st floor grand thru-way to amphitheater lined with boutique shops; basement access to Circulator Monorail station, offices, etc. Install a Bubbleator to top floor.

Seattle Center will not add a street grid, Dan. Forget it. Ain't gonna happen.

Is the fact that Chihuly's work would “match EMP very well” an indictment of the EMP's Gehry-knocking-off-Gehry architecture, Chihuly's assembly-line art, or both?

Plenty of room in those buildings for state-of-the-art high schools now. With the new transit options coming and the old school buildings falling to pieces, we could really make a positive out of this situation. Just a little cooperation between commerce and governments.

Which of the two buildings has survived two major earthquakes?

(Hint: It's not the Rainier Tower)

Bellevue is Omaha with more money and better scenery.

The Columbia Tower owners defaulted in the Seattle real estate bust in the early 80s. Yes, early 80's. The book “Securing the Spectacular City” mentions it, is about Seattle's boom/bust cycles and the actions taken by downtown's establishment to polish things up via “revitialization” and civility laws; that was before all you Texans and Californians moved here. The bust of the early 80's really lit a fire under their ass.

As we can see, their plan has worked out really well, and has insulated Seattle from the business cycles, and we are seeing no effects of the bubble collapse.

In Portland the vacancy percentages are worse in suburban office parks: http://www.oregonlive.com/business/index.ssf/20…

I couldn't find anything about Seattle in a quick search.

There's too much crappy office space downtown.

Look at that picture of the Columbia Center…if I were the owners I would buy up all the surrounding blocks and plow them down for a plaza and also build a 20 story parking garage for free parking (just like in every suburban office building).

Seattle needs to de-densify to compete with the superior sprawl of the suburbs.

I just wanted to post a note with more recent Seattle office vacancy rate numbers. New numbers just came out showing that Seattle vacancy rates are at 17.7 percent. Not 25% like Chris claims.

that's right – adaptive reuse. maybe we can convince council that the auto dealership should move into the columbia tower rather than SODO.

and now we want to expand downtown into Little Saigon. push out those 250+ little businesses and build more empty buildings. good thinking…

We looked at the Columbia tower, and they hard crap wiring and power accommodations and they building interior is so 1970s blah/beign…and on top of that, they were still charging over $30/ft and wanted a minimum 5 year lease. Seriously? With 1/3 of your building empty, you want a 5 year lease at premium price? No wonder you can't pay your mortgage.

If Seattle property management firms don't drop their prices, they will continue to lose great tenants, and the homeless will continue to camp out at the front doors of all these relic buildings.