A Tacoma property group has bought a historic hotel on Pacific Avenue for just over $1 million and plans to renovate it into "micro units" for University of Washington Tacoma students.
The Hotel Merkle building at 2405 Pacific Ave. was built more than a century ago. In the early 1980s, its owner converted the three-story building in the Brewery District into individual residential units.
Now new owner Premier Residential plans to offer "micro units" with full bathrooms and small kitchens, according to a news release from real estate firm Kidder Mathews. Agent Brian Richardson represented the buyer.
Under city code, micro units, called "efficiency multifamily dwellings," can be as small as 250 square feet and as large as 450 square feet.
Information on proposed rents at the to-be renovated building were not available.
“We are very excited about this project because it will contribute to the great changes happening in that neighborhood, and serves our mission and commitment to preserve and repurpose old historic properties in the city,” Eli Moreno, owner of Premier Residential, said in a news release. He could not be reached Monday.
Hotel Merkle is at the southern end of downtown, along the Link light rail line. Residents will be able to take the light rail to UWT, the area's transit hub at the Tacoma Dome station and to the Theater District. Eventually light rail will extend to the Stadium District and along Martin Luther King Jr. Way.
When the building opened in 1913 it was a hotel with a box manufacturer and the Hotel Merkle Saloon on the ground floor, according to the city's historic property database. Once Washington state's prohibition took effect in 1916 the saloon became a restaurant — with a reputation as a speakeasy and a bootlegging operation.
Its renovation comes as housing costs in Tacoma and Pierce County have surged in recent years as people from the Seattle area flee to areas with more affordable accommodations.
The median-priced Pierce County home sold for nearly $350,000 last month. Rents are climbing year-over-year in the low double-digit range, at times putting Tacoma among the top 10 cities in the country for rising rates.
To help meet the demand, developers recently started building micro units, with many of the first ones coming online this year.
In the case of Hotel Merkle, it's also in one of the nation's top 20 gentrifying ZIP codes: 98402.