BH Properties bought the struggling Pacific Place mall in Downtown Seattle at what turns out is a quarter of the price it traded for a decade ago.
The Los Angeles-based investor purchased the 335,000-square-foot indoor mall and parking garage at 600 Pine Street for a combined $88.25 million, the Puget Sound Business Journal and the Seattle Times reported.
That’s more than 75 percent less than the combined $358 million that seller Madison Marquette, based in Washington, D.C., paid in separate buys in 2014 and 2016.
Broken out separately, BH paid $66.75 million, or $199 per square foot, for the 26-year-old mall. Madison Marquette bought Pacific Place in 2014 for $271 million, or $809 per square foot.
BH paid $21.5 million for the 1,200-stall parking garage underneath. Madison in 2016 bought it for $87 million.
The Los Angeles investor bought the mall and garage earlier this month, but hadn’t disclosed the price. BH President Jim Brooks had said the firm would restore the property as Seattle’s premier shopping experience” — but gave no details on how it would enhance the experience.
The mall, which just lost its Lululemon store last month, is 55 percent vacant.
While many indoor malls across the U.S. have suffered or been redeveloped into mixed-use villages, traditional brick-and-mortar retail has fared much better, depending on the location.
Demand for retail space across the U.S. has soared since the pandemic, with availability at a historic low of 4.5 percent, according to CoStar Analytics.
Nearly every major U.S. market has had a “meaningful drop” in available store options over the past three years, CoStar reported, especially in the suburbs and for stores smaller than 2,500 square feet.
Retail in Downtown Seattle has made a major shift during the era of online shopping, the pandemic and the loss of office worker foot traffic, with recent departures from Nike to North Face, according to the Times.
But conditions on Seattle’s streets have improved, with violent crime and property crime down by nearly 15 percent from a year ago, according to the Business Journal.
Some 14.2 percent of retail stores in Downtown Seattle were vacant in the first three months of this year, with asking rents up slightly year-over-year, according to a recent report from Kidder Mathews. In the suburbs outside of Downtown, the retail vacancy was 3 percent.
The overall retail vacancy in greater Seattle was 3.3 percent, significantly below the national average and among the lowest vacancy rates on the West Coast, with leasing activity up 35 percent to 535,000 square feet.
— Dana Bartholomew