Martin Selig Sees More Properties Go Into Receivership

Martin Selig’s fall from grace in Seattle continues with another spate of properties falling into receivership.

On June 11, a King County court transferred nine buildings owned by Martin Selig Real Estate to a “custodial receivership” after the company defaulted on $378 million of debt, The Seattle Times reported.

Of the roughly 30 downtown Seattle buildings in Selig’s name, 19 have now been placed under outside management or handed over to lenders since late last year. Pandemic-related office vacancies have largely left the nearly 90-year-old office mogul unable to pay back $858 million in loans.

The most recent hit came last month when Selig lost The Modern, a nearly new 36-story office tower in Belltown, over a loan of about $235 million. That followed a dismal March when seven other Selig-owned office buildings, including the 1000 2nd Avenue headquarters of his company, were put into receivership after he defaulted on a $239 million loan. His firm laid off 86 employees shortly thereafter.

With the latest court-ordered transfers, 16 Selig buildings are under outside management while another three are in special servicing, indicating more financial insecurity on the horizon. The loss of properties is a notable tumble for Selig, who at one point claimed to own more than a third of the office space in downtown Seattle, according to the Times.

In addition to office buildings, Martin Selig Real Estate has seen parking lots across the city fall into receivership. In February, seven lots owned by Selig’s firm were taken over by receivers after he borrowed $50 million against the properties from Goldman Sachs.

Buyers have already started to snatch up the lots. Earlier this month, an affiliate of Seattle-based wealth management company Clarius Group bought a 7,200-square-foot lot at 408 1st Avenue West once owned by Selig.

Though Selig has navigated bankruptcies, foreclosures and lawsuits in the past, the string of financial woes in recent months points to a possibly bigger office vacancy problem for the 88-year-old developer.

Seattle maintains a 36 percent office vacancy rate in the downtown area, rivaling that of similarly struggling San Francisco. That figure is roughly triple the pre-pandemic vacancy level in 2019, the Times reported, citing Colliers data.

— Chris Malone Méndez