An embattled Martin Selig Real Estate has put two development sites in Seattle up for sale as it struggles to pay off hundreds of millions in loans tied to its office properties.
The locally based developer has listed the two-thirds acre lots for an undisclosed price at 400 Fourth Avenue W and 401-419 Queen Anne Avenue N, in Lower Queen Anne, the Puget Sound Business Journal reported.
The prices of the parcels were undisclosed. Both properties are zoned for apartments up to 85 feet. The Fourth Avenue site is a parking lot that can fit 200 units. The Queen Anne site includes a vacant office building and 20-unit apartment building built in 1912.
The sale of both development sites indicates trouble for the 66-year-old commercial development firm led by Martin Selig, who built the city’s tallest building, Columbia Center, four decades ago.
Financial challenges forced the octogenarian founder to sell the tower, but allowed him to continue building.
Now his firm faces more financial distress, as $379 million in securities backed by nine older Seattle office buildings comes due in April, according to the Business Journal.
Nearly $239 million commercial mortgage-backed securities (CMBS) loans matured this spring, backed by seven older office buildings.
And Martin Selig defaulted on a $240 million loan this month on two newer office buildings, with the firm indicating it may hand the keys to its lender, Acore Capital.
The combined debt adds up to $858 million, secured by office properties hammered by a pandemic shift to remote work, suppressing demand and driving values to historic lows.
Meanwhile, the cost of financing clings to the ceiling as waves of commercial loans come due.
This spring, nearly $20 billion in CMBS debt backing office properties across the nation was set to mature next year. Last year, $8.75 billion in office CMBS loans matured.
Bloomberg reported this month that Selig was telling lenders that high interest rates are making it “impossible” to pay the $379 million on the nine properties. Among them is 1000 Second Avenue, the 38-year-old tower and home to the company’s headquarters.
That Selig would sell two developable properties is a turnaround for a firm that once owned a third of Seattle’s Downtown offices.
Five years ago, Selig told the Business Journal that investors often approached him about buying company buildings.
“It happens about once a month,” Selig said, months before the pandemic turned the office market upside down. “I tell them, ‘Thank you, no.’”
Martin Selig Real Estate, founded by Selig in 1958, is the largest independent developer in the Pacific Northwest, with a commercial portfolio of 31 buildings and 4.9 million square feet, according to its website.