A receiver has transferred Martin Selig Real Estate’s Third Avenue and Virginia Street property in downtown Seattle to Urban Visions for $4.3 million.
Urban Visions CEO Greg Smith indicated he purchased the property with John Diamond, president of Diamond Parking. It’s Urban Visions’ second significant Seattle acquisition within a week. The developer acquired the Grand Central Block in Pioneer Square on Friday.
The Third and Virginia price calculates to just $332 per square foot, slightly less than one-third of what Selig paid for the property a decade ago, during the seemingly unlimited days of Amazon’s expansion.
The property is one of seven parcels that Selig lost this spring, when he agreed to receiver appointment. Deeds of trust indicate Selig borrowed $50 million against the properties. Two of those properties, Lower Queen Anne parcels at 408 First Avenue West and 133 First Avenue North, sold, with records showing a Diamond Parking affiliate purchasing the latter.
Selig first outlined his plans to construct a skyscraper with office space and apartments at Third and Virginia in 2015.
“I’m having a good time,” he stated back then. It was one of numerous Selig projects around the time when Forbes named him “a new billionaire.” The magazine estimated his worth at $1.1 billion in 2015, and he remained on the list until 2023, with an estimated net worth of $1.4 billion.
Selig did not respond to requests for comment.
Smith and Diamond are from longtime Seattle real estate families, and Smith briefly worked for Selig in the mid-1990s, managing the legendary builder’s portfolio before a falling out. He stated in 2017 that the experience gave him confidence to transition from managing properties to developing them.
Zoning around Third and Virginia permits 440-foot towers. Smith indicates a high-rise residential tower ultimately will be constructed on the property that has approximately 25 parking stalls and a 111-year-old, three-story office building. Development will wait until the market shifts, and the new owners plan to clean up the partially covered lot to generate income in the meantime. There’s substantial work to do, stated Smith, who compares the covered lot to “a drug den.”
Smith is among the most ardent believers in the city. His family began investing in Seattle real estate in the late 19th century. Around this time, his great-great-grandfather was elected mayor.
Smith believes the future of downtown is residential, and that’s where he is focused. Earlier this year, he closed the marketing center for the 36-story Net office tower planned for the vacant half block on Third Avenue between Columbia and Cherry streets. Urban Visions also owns the Jack, an empty 145,000-square-foot speculative office building on the waterfront in Pioneer Square.
The newly acquired Third and Virginia property is “West Edge Tower all over again,” he stated, referring to the 39-story luxury apartment project near Pike Place Market. Smith acquired the property, a surface parking lot, for $12 million last decade. He then constructed the tower with financing from Mitsui Fudosan America and sold the property three years ago for $293 million.
It has been a challenging several years for Martin Selig Real Estate. It lost control of much of its portfolio, and this spring, Selig’s daughter and heir apparent Jordan Selig left the company. Around that time, MSRE terminated 86 employees after seven older buildings entered receivership.
Earlier this year, MSRE also agreed to transfer to a receiver nine office assets backing a $345 million loan. Among them are the 40-story 1000 Second, which holds the art-filled headquarters of Martin Selig Real Estate.
MSRE has also transferred ownership of two newer assets, the 15-story 400 Westlake in South Lake Union and the Federal Reserve Building downtown to lender Acore Capital. That was followed by Acore acquiring the 800 Alaskan waterfront development site via a deed-in-lieu of foreclosure.
At the time, Seattle-based Urban Renaissance Group indicated it had assumed management of the full-block 800 Alaskan site, where MSRE was planning a 17-story tower with residences and commercial space. URG stated it will redesign and reentitle the project.
The $4.3 million purchase price representing catastrophic value loss, with the $332-per-square-foot acquisition cost demonstrating how dramatically downtown Seattle real estate has depreciated when Selig paid approximately $1,000 per square foot during Amazon’s explosive growth era creating one of commercial real estate’s most stunning collapses.
The receiver-managed sale indicating financial distress resolution, with the court-appointed third party liquidating Selig assets to satisfy creditor claims demonstrating that the legendary developer no longer controls his own portfolio requiring forced sales at distressed prices far below historical investment costs.
Urban Visions’ second major acquisition within one week signaling opportunistic buying spree, with Greg Smith’s purchases of both the Grand Central Block in Pioneer Square and the Third-Virginia property demonstrating that well-capitalized local developers view the current market downturn as generational buying opportunity to acquire prime sites at depression-era prices.
The Greg Smith and John Diamond partnership combining complementary real estate expertise, with Urban Visions’ residential development capabilities pairing with Diamond Parking’s surface lot operations and land banking experience creating synergistic ownership structure where parking generates interim revenue while residential development awaits improved market conditions.
The longtime Seattle real estate families background providing multi-generational perspective, with both Smith and Diamond representing dynasties that have survived multiple boom-bust cycles giving them confidence and capital to acquire distressed assets when less-established operators flee the market fearing continued deterioration.
The one-third of Selig’s purchase price calculation quantifying the market collapse, with the dramatic 67% value decline over just one decade demonstrating how the combination of remote work killing office demand, rising interest rates, and downtown safety concerns have devastated commercial real estate values.
The seven-parcel Selig loss this spring indicating portfolio-wide collapse, with the Third-Virginia property representing just one component of much broader financial distress where Selig simultaneously lost control of multiple assets suggesting the problems transcend individual properties to reflect systemic overleveraging or cash flow failures.
The $50 million borrowing against seven properties revealing the debt burden, with the substantial loan secured by multiple parcels indicating Selig used aggressive financing strategies that worked during appreciation but became unsustainable when property values declined and rental income dropped leaving insufficient cash flow to service the debt.
The Lower Queen Anne sales including Diamond Parking affiliate purchases demonstrating Diamond’s separate acquisition activity, with John Diamond’s company apparently buying additional Selig distressed properties beyond the Third-Virginia partnership suggesting the parking operator views the current market as opportunity to expand its land holdings at favorable prices.
The 2015 Selig skyscraper announcement representing the peak optimism era, with the legendary developer’s enthusiasm about mixed-use tower plans occurring during Seattle’s euphoric belief that Amazon’s growth would continue indefinitely justifying unlimited development that market realities subsequently proved unsustainable.
The Forbes billionaire designation in 2015 highlighting Selig’s former wealth, with the $1.1 billion net worth estimate and subsequent increase to $1.4 billion by 2023 before disappearing from the list demonstrating how rapidly commercial real estate fortunes can reverse when market fundamentals shift.
The $1.4 billion 2023 estimated net worth before portfolio collapse quantifying the devastation, with Selig’s disappearance from Forbes’ billionaire rankings following the receiverships suggesting that the portfolio losses potentially erased over one billion dollars in personal wealth within just a couple years.
Selig’s non-response to comment requests indicating either embarrassment or legal constraints, with the legendary developer’s silence about losing signature properties at catastrophic losses suggesting either the humiliation of public failure or attorneys advising against statements that might complicate ongoing receivership proceedings or creditor negotiations.
The Smith-Selig 1990s employment history providing personal connection, with Greg Smith’s brief mid-decade tenure managing Selig’s portfolio before their falling out creating ironic full-circle narrative where the former employee now acquires his former boss’s distressed properties at fire-sale prices.
The 2017 confidence statement about transitioning from management to development reflecting Smith’s trajectory, with his acknowledgment that working for Selig provided the foundation for independent development career demonstrating how mentorship relationships, even those ending badly, can catalyze entrepreneurial success.
The 440-foot zoning allowance enabling high-density development, with the permitted tower height providing substantial development rights that justify land acquisition despite current weak market conditions since future residential demand may support vertical construction when downtown revitalization occurs.
The 25 parking stalls and 111-year-old three-story building describing existing improvements, with the minimal parking and century-old structure providing nominal interim income while representing teardown candidates when market conditions justify high-rise development requiring site clearance.
The high-rise residential tower ultimate vision articulating long-term strategy, with Smith’s plan to eventually construct apartments rather than office space reflecting his conviction that downtown’s future depends on converting from daytime commuter destination to 24-hour residential neighborhood.
The market timing patience demonstrating disciplined development approach, with Smith’s acknowledgment that construction will wait until conditions improve showing he won’t rush into vertical development simply because he acquired the site cheaply but will generate parking revenue until fundamentals support residential tower economics.
The “drug den” characterization revealing current site conditions, with Smith’s blunt description of the partially covered lot highlighting the deterioration and illegal activity that have plagued downtown Seattle during the pandemic-era decline requiring immediate cleanup before the property can generate legitimate income.
