Jan. 19, 2011 at 9:45am
Washington Building manager David B. Morton and investor and owner representative Michael J. Allan | (PHOTOS BY TODD MATTHEWS / ALL RIGHTS RESERVED)
It's safe to say the historic Washington Building in downtown Tacoma has seen better days. To be sure, the 1925 structure itself is in great shape: high-speed elevators whisk visitors to their destinations; a $200,000 lobby renovation three years ago still looks brand new; and an on-site superintendent makes sure all the equipment is up and running.
But five months ago, the Washington Building's biggest tenant, the Washington State Attorney General's Office, moved down the street and into the shiny, LEED-platinum Pacific Plaza -- leaving behind six floors of vacant space. Another challenge for anyone leasing office space in downtown Tacoma: Russell Investments' 900 employees moved out of the company's 12-story building and into its new home in the former WaMu Center in downtown Seattle. Suddenly, there is a flood of available office space in downtown Tacoma.
The 17-story, 125,000-square-foot Washington Building is owned by a group of investors led by Seattle-based Stratford Company. If you have paid close attention to another iconic historic building downtown -- Old City Hall -- the Stratford Company name should be familiar to you.
Last week, I met with Michael J. Allan, Washington Building investor and owner representative, and David B. Morton, Washington Building manager, for an interview. On Jan. 7, Allan and Morton delivered a letter to tenants announcing some of its plans for 2011 (full disclosure: the Tacoma Daily Index is located in the building). The pair shared those plans with me: the ownership group has hired Neil Walter Company to launch a marketing campaign in February to draw new tenants; the group is also working with Umpqua Bank on a financing package that will "improve our cash flow, and thus our ability to maintain and improve the structure and attract new tenants," according to Allan; they have completed a model office unit for prospective tenants and hired a designer to revamp common areas throughout the building; finally, Allan told me one of the building's investors has provided $872,000 to "help us meet all of our financial obligations for a good many periods of time to go. So we've got some positive things to say about the building right now." And despite the economic downturn, Morton told me he was able to attract 13 new tenants last year by focusing on small businesses and start-up companies.
Still, it's not all rosy. When I inquired about the building's vacancy rate, Allan was reticent. "I'd rather not share that," he said. "We can't deny that it's tough. The economy is just terrible. Our vacancy is very high -- much higher than we would like it to be."
"The Great Recession is a big headwind in the commercial market that we're just working our way through," added Morton.
A blog following news and features published in the Tacoma Daily Index newspaper.
*****ALL PHOTOS COPYRIGHT (C) TODD MATTHEWS / TACOMA DAILY INDEX*****