Walton Street Capital Acquires Smith Tower for $44M

Rising 522 feet from the street, Smith Tower was the fourth tallest building in the world when it was completed in 1914. It remained the tallest west of Chicago for almost 50 years.

Samis Foundation, the seller, acquired the building in 1996 for $9 million and proceeded to spend another $20 million seismically retrofitting the building, upgrading the electrical and plumbing systems, adding its first-ever HVAC system and generally refurbishing the interior.

The 257,000-sf historic landmark is around 90% leased. Anchor tenants include Disney and Providence Health. Microsoft Corp. recently leased a full floor in the building. The adjacent 8,000-sf Florence Building came with the deal I part because it houses mechanical and electrical infrastructure that supports Smith Tower.

Walton Street Capital, which is headquartered in Chicago, is the 20th owner of the Smith Tower. Previous out-of-state owners of the Smith Tower have included Northwestern Mutual Life and G.E. Credit Equities.

Walton has been an active owner in the Seattle real estate market over the past several years. In late 2005, it acquired a four-building, 1.2 million-sf portfolio of properties from the Benaroya Company for $345 million.

Walton Street Capital executive Perry Pinto tells GlobeSt.com he's happy to have another stable office building in his Seattle portfolio, especially one of such significance. "Samis did an unbelievable job of bringing it into the 21st century in terms of the building systems," says Pinto, who utilized broker Michael Allmon of Real Estate Advisory Partners to acquire the property.

Samis Foundation, a nonprofit established in 1987 by Sam Israel, is committed to enhancing Jewish education in Washington and enhancing the appreciation for Jewish culture and history in both Washington and in Israel. William Justen, Samis' managing director of real estate, tells GlobeSt.com that the sale was part of a plan to diversify the foundation's holdings. Even after the sale, Samis remains one of the largest property owners in Pioneer Square.

"Right now our assets are mostly in real estate; we need more balance," says Justen. "We will use the proceeds to invest in stocks and bonds, creating more liquidity, and to pay down debt on other properties."