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What goes down must come up: How downtown Seattle's forsaken real estate could bring good fortune

caption: The historic Coliseum Theater,  known to most as Banana Republic's former downtown Seattle location, was put up for auction in May 2024. The results of that auction are not yet publicly known.
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The historic Coliseum Theater, known to most as Banana Republic's former downtown Seattle location, was put up for auction in May 2024. The results of that auction are not yet publicly known.
KUOW Photo/Megan Farmer

Some real estate experts say downtown Seattle has hit rock-bottom, or will soon. And there’s nowhere to go but up.

Downtown Seattle has been seeing a lot of new investment lately. You may not see those investments when you’re walking down the street.

But behind the scenes, banks are putting pressure on owners to sell unprofitable buildings, often at deep discounts. And that's leading to new investments that will help usher in downtown's renaissance.

That's according to Steve Schwartz, senior vice president at CBRE in Seattle, an international firm that tracks commercial real estate.

Last month, the high-end downtown mall known as Pacific Place sold for about 25% of its pre-pandemic value.

While newer office buildings are holding their value, Schwartz says, some older office and retail-oriented buildings are selling at discounts of 50%, or even 90%. Having paid bargain-basement prices, their new owners are spending money on new amenities to make those buildings more attractive.

“We have bicycle spas, showers, lockers, places where you can get your bike worked on during the day. They may have a bike mechanic on site. We have some owners putting in pickleball courts. Seems like everywhere is a pickleball court these days,” he says.

Schwartz says that even if locals are skeptical, investors are betting on downtown Seattle’s future — especially with some buildings selling for pennies on the dollar.

“Seattle is on its way back to thriving,” he says.

He predicts that two years from now, we’ll look back on this time and say, “Remember when?”

“And it's happened cycle after cycle," he says. "If you recall, in 2008-09, everyone thought the world was going to end. and it was for a different reason — that was the great financial crisis. We're coming out of a pandemic this time. But it's in the rearview mirror and trends are changing.”

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