The Seafirst Building in downtown Aberdeen is on the online auction block for the second time in four months. The first sale of the iconic six-story commercial building at 101 E. Market for $150,000 in late May fell through.
The new auction begins at 9 a.m. on Monday and closes at 10:48 a.m. on Wednesday, according to Steve Narish of Auction.com. The starting bid has dropped the second time around, from $5,000 in May to $1,000 now.
The building is owned by Gramercy Property Trust Inc.
“They must want to unload the building,” said David Bielski, who manages the trust that owns the land the structure sits on. One of his associates signed up for the auction last time and found in disclosure documents that Gramercy is allegedly losing $90,000 per year on the building due to maintenance costs and loss of rent, Bielski said. Bidders must sign up for the auction to obtain access to disclosure documents.
Gramercy did not notify him of the new auction dates, “a little bird told me,” Bielski said. Bielski manages the trust with his wife Sandra. Gramercy pays more than $125,000 in rent per year to the trust, which is the endowed care fund for the Aberdeen Cemetery Association Inc. The trust has a 50-year ground lease that extends through June 30, 2022.
A commercial ground lease is usually a long-term lease of land where tenants are responsible for paying for improvements. It is a way to obtain access to valuable land, but not necessarily optimal from a tenant’s standpoint.
Bielski could not remember the last major upgrade to the building, which was built by Seafirst in the early 1970s and was once one of Aberdeen’s premier rental spaces. Several tenants have left in recent years, he said.
Whoever wins the auction will inherit the ground lease terms. The property description on auction.com mentions “ground lease interest” and says the building is 35,864 square feet and is still about 60 percent occupied.
The building is due to be re-evaluated this year by the Grays Harbor County Assessor’s office. The last valuation, from 2009, listed the building as worth $2.82 million and the land value as “$0.” Bielski estimates the land is worth between $350,000 and $400,000. The assessor describes the condition of the building as “average.” The Grays Harbor County Treasurer’s office reports the building is current on property taxes, which total $37,904.11 per year.
Email and phone messages left for agent Ned Schooler of Marcus & Millichap, the contact agent for the auction, were not returned. Darren Foster, the agent for Auction.com, was busy with another auction and had not commented by press time.