Despite Amazon’s return-to-office mandate, foot traffic around Amazon’s Seattle offices for January 2025 remained 26% below January 2019 levels. Just this past December, the “Houdini of Seattle’s office market,” Martin Selig, defaulted on a $240 million loan.
Depressed foot traffic has inflicted suffering not only on commercial landlords but, more importantly, on local businesses that add to Seattle’s charm. Steps away from Pike Place Market, retailers Danner, Free People, Royal Robbins and sandylew have departed. After more than a quarter-century on First Avenue, the art gallery Vetri announced its closure, stating: “small independent businesses like ours have to confront the problematic reality that while rents remain at downtown prices, the foot traffic we rely on isn’t what it used to be.”
The Modern, one of Selig’s downtown properties completed in 2020, was originally designed as a mix of offices and apartments. But even office mogul Selig has seen the writing on the wall; the Modern’s offices are currently being converted to apartments.
Last month, the Seattle Mayor’s Office and City Council adopted tax deferrals for the conversion of underutilized commercial properties to residential housing. Besides significant financial barriers, however, many modern office buildings are simply incompatible with residential conversion. Deep floor plates — long, narrow floor plans — occupied by interior cubicles and server rooms, create serious design issues for apartments, which require proximity to outward-facing windows for adequate natural lighting. Office plumbing and HVAC systems are centralized, whereas each apartment usually has its own bathroom, kitchen and thermostat.
The city of Seattle should think on its feet: For especially difficult-to-convert office buildings, classrooms and dormitories offer economic and logistically viable alternatives. Dormitories, like offices, typically have communal bathrooms and kitchens. Windowless interiors of office buildings can accommodate classrooms, reading and student group meeting rooms, music practice rooms, faculty and administrative offices, and a whole host of other uses. Expansion of academic institutions into downtown Seattle would generate much-needed foot traffic.
The dynamic, mixed-use nature of a college campus — where students sleep, study and socialize — means more around-the-clock activity and more demand for local restaurants, retailers, venues and cultural institutions like the Seattle Art Museum and Benaroya Hall. Foot traffic gains from students living and learning in downtown Seattle are further amplified by faculty and off-campus student commuters, members of the public attending community events, and visiting families.
International and out-of-state students bring outside sources of consumer spending and sales tax revenue to downtown Seattle. Provided that sufficient quantities of on-campus housing come from re-purposed office buildings, the student population wouldn’t adversely affect local housing supply. Student spending also helps to modulate downtown Seattle’s fluctuating tourist economy — the academic year almost perfectly dovetails with Seattle’s tourist season.
University campuses are already driving urban center economies across the country: A growing Georgia State campus “has definitely been a good thing for downtown Atlanta,” earning GSU the Marcus Downtown Economic Impact Award. Cornell Tech’s satellite campus on NYC’s Roosevelt Island supported 2,800 jobs. “Major strides in downtown San Antonio” by the University of Texas “create vibrant spaces that attract people and foster engagement.” Vanderbilt’s satellite graduate campus in West Palm Beach is expected to have a projected return on investment of “more than 20 to 1.”
Seattle leaders need to look no further than the University of Washington: U District foot traffic for September 2024 increased 34% compared to September 2019 levels — success that could be replicated four miles south. Seattle Office of Planning & Community Development this past November expressed interest in a Gensler study on converting Seattle offices into “co-living” spaces, which are functionally just dormitories.
As Washington lawmakers explore additional financial incentives for developers to convert offices into apartments, they should also strongly consider measures that invite universities to transform high-vacancy commercial properties into classrooms and campus housing. A satellite campus among the local businesses, corporate offices and cultural institutions of downtown Seattle would strengthen the virtuous cycles of innovation of Seattle’s knowledge economy and reinvigorate the neighborhood.
Originally published in the Seattle Times.
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