New owner of familiar Tacoma office tower plans upgrades to 1980’s era building
Another high-profile property in downtown Tacoma changed owners before the end of 2021.
Tacoma Financial Center, 1145 Broadway, was purchased for $41.25 million (excluding fees and closing costs) by DM Ventures TFC, an LLC representing Kirkland-based MJR Development, from Tacoma Financial Center Partners, an LLC led by Richard Getty of Tacoma.
The sale closed Dec. 29, nearly a month after the former Key Tower, 1119 Pacific Ave., sold to Spokane-based redevelopers.
The financial center last changed ownership in 2003 in a $16.75 million transaction.
In an interview Monday with The News Tribune, MJR partner Mike McClure said his commercial real estate development firm had been working on the Tacoma Financial Center purchase for nearly a year after scoping out Tacoma for two years for just such a site.
“We’ve been looking for a building in a great location,” he said. “And we’ve been looking for a building with great bones that lays out nicely for small tenants. We’ve probably looked at four or five other buildings in Tacoma that didn’t really make the cut in one of those dimensions, but this one really is super-high quality.”
MJR has office properties spanning roughly from Everett to Olympia.
“I’m big on the I-5 corridor, and we kind of had this hole in our portfolio around Tacoma,” McClure said. His company has been “focused on kind of this hybrid office model of suburban office. And so we’re looking for sites, you know, near or just outside of major cities. And Tacoma keeps showing up on the radar screen as being pretty high.”
Working from home and the pressures of the pandemic haven’t fazed the company, but rather is part of their business strategy, particularly as high demand for housing in Pierce County persists.
“Employers are kind of really looking at their offer strategy,” he said. “Progressive employers are wanting to offer their employees options, and one option might be working from home, one option might be coming into corporate, and another option might be a satellite office. And so we’re seeing a trend and frankly, like most COVID trends, they were most of them were in play before COVID.
“Smart employers are realizing, ‘Hey, let’s open up an office in you name it, whether it be Federal Way or whether it be Tacoma or whether it be Lakewood or whether it be Lacey. Those are all projects that we do have. And we just see that accelerating.”
Other sites in MJR’s portfolio include The Hub and 6th and Woodland in Lacey, The 101 and The Atrium in Olympia, Lakewood I and II in Lakewood, and The Puyallup Building, expanded to serve regional offices of the Department of Children and Family Services and an office for the Department for of Vocational Rehabilitation.
MJR also has sites in Lynnwood, Federal Way, Mount Vernon, Bellevue, Everett, Kirkland, Poulsbo, Seattle, Kent and Woodinville.
While some of its other site development has focused on or included residences, no apartments are planned for the Tacoma property, McClure said. However, other amenities are planned, some COVID-specific, others development upgrades.
To address COVID safety, he noted, “there’s changes in ventilation and you use upgraded filters. You also open up the outside air to its maximum. You’re also looking at no-touch surfaces. We typically install no-touch faucets in the restrooms, door kicks on the doors, that kind of stuff. And then extra cleaning, obviously, so extra janitorial services.”
Given the competition for tenants, he noted, there will be more to come for the building.
“We have typically added, for instance, restaurants and services at our projects. So in this case, we’re looking at a restaurant in the lower floor of the Tacoma Financial Center, and we’re imagining a wine bar, possibly a tap room,” he said.
“We will likely add a gym workout space, will likely add some reservable conference rooms,” he said. “So when you come into the building, you can have a shared conference room, so you don’t have to build one if you’re a smaller tenant. We’ve added event spaces to our other projects. So if you wanted to do a Christmas party or a larger meeting, then you have space for your office. Those are all amenities in the building that you would have access to, and we’ve got some other ideas.”
A library “casual hangout space” outside offices also is under consideration, he noted, with added amenities taking another year or so for permitting and development.
The 15-story building, built in the 1980s by a real estate division of the Weyerhaeuser Co., has around 200,000 rentable square feet, according to McClure, and occupancy is at 60 percent. The building also has its own parking.
Some of the larger occupants include Centene (Coordinated Care), U.S. Bank and UBS Financial Services.
He added the building “lends itself to small- to medium-sized tenants,” he said. “A lot of the tenants in the Tacoma market are not necessarily large tenants, less than 10,000 square feet, so therefore, by definition, multi-tenanted floors. We’re more than willing to do that.”
“We’d love to hear from small all the way up to large tenants,” he said. “Tacoma is a pretty happening place, and I told my partner when we closed, it does not hurt my feelings to spend more time in Tacoma.”
This story was originally published January 3, 2022 at 12:32 PM.
