Average downtown building goes for hefty $23.6 million

Another day, another big building changes hands.

The thunderstorm of investment in Seattle real estate kept rumbling as a Texas real-estate investment firm paid $23.6 million yesterday for the 12-story First & Stewart Building.

That works out to $260 a square foot for a nondescript, red-brick building that, according to Officespace.com, is about 26 percent vacant.

Stuart Williams, part of the Pacific Real Estate Partners team that marketed the property, said most of the interest came from institutional buyers outside the Puget Sound area.

"It tends to reinforce that institutional capital likes Seattle as a market to spend money," he said.

The buyer is Archon Group, an Irving, Texas-based firm with $3 billion in assets. The seller was a partnership of New York pension-fund adviser DRA Advisors and Seattle investor Jack Rader.

First & Stewart was the third downtown Seattle building in little more than a week to sell for more than $10 million.

On Monday, Goodman Real Estate paid $38 million for the Medical Dental Building, a 1925 terra-cotta building next to Westlake Center.

And last week, the Executive Pacific Plaza Hotel, another historic building at 400 Spring St., was bought for $13.9 million by a partnership of Seattle and Vancouver investors who plan to renovate it into a boutique hotel.

Don Fosseen, a vice president at CB Richard Ellis, says office buildings in 2005 are selling at double the pace of last year — and triple the pace of the year before.

"This is a tremendous amount of activity," he said.

Seattle's office-vacancy rate stands at about 13 percent, according to Officespace.com.

That figure has been dropping but is expected to jump when Washington Mutual moves into its new headquarters next year and vacates a large amount of space in nearby buildings.

Tom Boyer: 206-464-2923 or tboyer@seattletimes.com