Downtown Seattle’s tight office market is allowing one historic, but outdated, office building to plot a move into the big leagues.
The owner of the 98-year-old Joshua Green Building, constructed by and named after one of Seattle’s business pioneers, announced plans Friday for a major renovation — which it hopes will translate into higher rents.
The 10-story building will get long-overdue mechanical and structural updates, said Stanley McCammon, president of the Joshua Green Corp. Floors chopped up into small offices will be reconfigured to accommodate the larger space needs many businesses now have.
The family-controlled company has looked at renovation before but held back, McCammon said: “Now, you have a market environment that maybe allows for it.”
Downtown vacancy rates are in the single digits. Lease rates have soared. But the renovation will displace small tenants, many in the jewelry business, including some who have been in the building close to a half-century.
The Joshua Green Building and the 4th and Pike Building across the street are Seattle’s Diamond District, said Alan Chappron, a gem appraiser who has leased space in the Green Building since 1987.
“I guess they’re doing what they have to do,” he said of the remodeling plans, “but we’re going to be displacing maybe a whole industry.”
Work should start in late spring or early summer, McCammon said. It will occur in phases, he said, so the building won’t ever be completely vacant.
The project is scheduled for completion in late 2009.
Joshua Green came to Seattle in 1886, entered the shipping business and ferried miners and their gear to the Klondike gold fields. Later he went into banking. He remained active in business almost until his death, at 105, in 1975. Companies he owned are now parts of Washington State Ferries and U.S. Bank.
The Joshua Green Building is part of a portfolio of 750,000 square feet of office and retail space that Green’s descendants own in the Seattle area and Spokane.
A century ago office tenants typically wanted 500 to 2,000 square feet, McCammon said, and the Joshua Green Building was designed for them. Today, he said, businesses are more likely to want 6,000 to 10,000 square feet, but the old building can’t accommodate them.
When the remodeling is finished, McCammon said, tenants will have the option of leasing an entire floor.
The building will get updated heating, cooling and fire-suppression systems, new stairs and other safety improvements, seismic upgrades and new wiring to better support modern technology. Drop ceilings will be removed.
The building is “barely 20th-century … let alone 21st-century,” McCammon said. “We have a lot of space heaters in the building. Our air-conditioning system is a bunch of window units.”
The terra-cotta facades along Fourth Avenue and Pike Street will remain intact, he said, but some modifications to the building’s exterior are planned, especially at street level.
Those changes will require approval from the city’s Landmarks Preservation Board, since the Joshua Green Building is a designated historic landmark. Sarah Sodt, the board’s downtown coordinator, said the owner hasn’t submitted anything yet.
“Repositioning that building to Class A makes sense in this market,” said Kip Spencer, co-founder of Officespace.com, a real-estate database. “Frankly, that building has really been off the radar screen for the majority of real-estate brokers.”
There’s an untapped market for historic, high-end space downtown, said Patrick Callahan of Urban Renaissance Group, the project’s development manager. He estimated a remodeled Joshua Green Building could command rents of $36 to $40 a square foot.
Building tenants pay between $17 and $21 now. Chappron, the gem appraiser who leases 660 square feet on the 10th floor, said tenants such as him, who require little space and can’t afford high rents, are having trouble finding anything comparable close by.
David and Evelyn Ghan have operated a watch-repair business on the 10th floor for 48 years. David said he once repaired a watch for Joshua Green and has a thank-you letter on his wall from the patriarch.
The Ghans, who said they have a “verbal lease,” said they were notified two weeks ago that they must vacate by late August. “I can understand that they’re doing what they have to do from a business perspective,” Evelyn Ghan said, “but after all these years, this came as a complete shock … most of us are pretty unhappy.”
The company notified tenants last September that it was considering renovating, McCammon said.
So far about one-third of the building’s 45 tenants have received notices to vacate, he said. The Green Corp. is offering relocation assistance, including introductions to brokers and other landlords and, in some cases, help with moving expenses, he said.
Some tenants will relocate temporarily to parts of the building not affected by construction, McCammon added.
He wouldn’t say how much the project is expected to cost.
