Seattle developer Stream Real Estate has moved a step closer to delivering the city’s first office-to-residential conversion since the pandemic following its acquisition of a vacant 52,270 square foot commercial building in the Lower Queen Anne business district.

In a deal brokered by Cushman & Wakefield, the four-story Queen Anne Plaza with two levels of parking at 201 Queen Anne Ave N was acquired from East West Investment Company, Inc., for US $7 million.

The 0.33 acre site is located near Climate Pledge Arena, home of the Seattle Kraken of the National Hockey League (NHL), the Seattle Storm of the Women’s National Basketball Association (WNBA), the Seattle University Redhawks men’s basketball team, and the Rat City Roller Derby league of the Women’s Flat Track Derby Association.

Stream Real Estate has achieved LEED certification for previous redevelopments and is committed to ‘going beyond carbon neutral to make a positive and lasting impact’.

Cushman & Wakefield managing director Dan Chhan, and colleagues Tim McKay, Sam Wayne and Matt Kemper represented Stream Real Estate in the negotiations, with Senior Director Brandon Burmeister and Andrew Shultz (both also with Cushman & Wakefield) representing the seller.

Chhan comments: “Queen Anne Plaza was an ideal prospect as a multifamily conversion for several reasons.

“The building is fully vacant, allowing Stream Real Estate to more swiftly execute its transformation plan unencumbered by any existing tenants. The structure’s ±13,000-sf floorplates and abundant natural light were also a draw as a multifamily candidate, as were its existing two levels of on-site parking. It also boasts a fantastic ‘main and main’ location near the arena and abundant amenities, while its upper floors also offer great views of Elliott Bay and the Puget Sound.

“Stream Real Estate has demonstrated a well-thought-out strategy and understanding of the full potential for this property as a multifamily location, factoring key characteristics such as the neighborhood’s walkability, amenities, and more in addition to its aforementioned physical features.”

Obsolescence Equals Opportunity, a report released last year by Cushman & Wakefield, explains how remote and hybrid work are reducing demand for office space and resulting in shrinking footprints and, in some instances, empty office buildings. It forecasts there will be 330 million square feet of obsolete office space by the end of the decade.

Echoing the report’s findings, Burmeister says: “The sale of Queen Anne Plaza, an outdated office building originally built in 1985, supports the findings from our firm’s report and presented a prime opportunity as a potential conversion site.

“The impact of the pandemic on office occupancy and subsequent obsolescence phenomenon has led owners/investors to quickly re-evaluate their office assets and come up with new potential solutions to either attract tenants or for lower-tier assets, to seek alternative uses as permitted by their city zoning/guidelines.

“Earlier this year, the City of Seattle proactively sought ideas for residential to office conversions to help create a future vision that fosters a thriving environment. The city has also rezoned some CBD sites to promote more housing.

“A diversified economic base of high-tech companies ranging from gaming and software to biotechnology, manufacturing, retail, and aerospace technology generates the demand for residential and support services in the Puget Sound region.

“Where viable, adaptive reuse of office buildings may help to serve the regional (and national) housing shortage while also avoiding potential overflow of derelict and vacant buildings in order to revitalize our cities and communities.”

In addition to Climate Pledge Arena, Lower Queen Anne (which is also known as “Uptown”), boasts several other attractions including the Space Needle, Museum of Pop Culture, Chihuly Garden and Glass, Pacific Science Center, Marion Oliver McCaw Hall, and the Seattle Center Monorail.

Home to several prominent Fortune 500 companies including Amazon, Microsoft, Google, Apple, Meta, Starbucks, Nordstrom and Nintendo, Puget Sound on the northwestern coast of the Washington State has established an international reputation as a tech hub which makes it a magnet for technology businesses seeking to recruit from its large local pool of tech talent.

Earlier this year, the City of Seattle proactively sought ideas for residential to office conversions to help create a future vision that fosters a thriving environment. The city has also rezoned some CBD sites to promote more housing.