Seattle's Iconic 42-Story Smith Tower Sold to Local Investors Led by GT Capital

Smith Tower, Seattle's first skyscraper built over a century ago, has been acquired by a group of local investors led by GT Capital. The purchase from Goldman Sachs includes not only the iconic 42-story building in Pioneer Square but also the nearby Butler Garage. The new ownership group features prominent Seattle families and includes Freestone Capital Management and Evergreen Ventures, the alternative investment arm of Evergreen Gavekal.

Positioning for Future Success

Joe Razore, Founding Principal of GT Capital, highlighted that the new investment will strengthen the building's position in attracting tenants. Smith Tower, located at 506 Second Ave., spans 268,700 square feet and has been primarily an office space since its completion in 1914. The tower, designed by New York architects Gaggin & Gaggin, was once the tallest building west of the Mississippi. It includes ground-floor retail, an observation deck popular with tourists, and has undergone several renovations, including major updates in the late 1990s and 2010s.

Modern Amenities and Tenancy

Smith Tower is LEED Gold-certified and offers various amenities, including an average floorplate of 11,351 square feet, a 22nd-floor tenant lounge, a rooftop deck, a fitness center, and a cardio studio. The Butler Garage is located just across the street. Current tenants include tech companies, law firms, and a publisher, with office leasing managed by Broderick Group's Damon McCartney and Lauren Hallgrimson.

Challenges in the Seattle Office Market

The Seattle office market, like many across the U.S., is facing challenges, with vacancy rates increasing for the 10th consecutive quarter. According to a second-quarter 2024 report by Kidder Mathews, the Puget Sound area saw a vacancy rate of 15 percent at the end of June, the highest since 2010. Despite this, office sales in Seattle totaled over $215 million in the first half of 2024, with the most significant transaction being Alaska Airlines' $85.8 million purchase of the Boeing Longacres 25-01 Building.