Building near Tacoma Mall previously eyed for apartments has sold. What’s next for site?

An office/retail building near the Tacoma Mall, which has previously been considered for apartment redevelopment, has a new owner.

Pierce County records show the three-story building, 4218 S. Steele St., sold Dec. 9 for $6.5 million to AVA 200 LLC, representing Bend, Oregon-based Pahlisch Asset Management.

Pahlisch’s website shows the company involved in construction and development as well as property investment, with development sites in Oregon and Washington.

In this region, it is the developer of Imber at Union Mills in Olympia, a 279-unit, gated apartment community.

The Tacoma Steele Street building’s seller was 42 Park Mall Holdings, representing Forbes Development Group of Tacoma.

Pahlisch Commercial had the site surveyed in April, according to county records. The City of Tacoma’s online permit portal shows another development pre-app filed in May. That online file simply describes it as residential new construction, planned to start next July and valued at $40 million.

No further details were immediately available regarding the Tacoma property, and a Pahlisch representative listed with the buyer’s LLC did not respond to request for comment.

Past redevelopment plans

Forbes purchased the building in September 2018 for $2.47 million. At the time, development representatives told The News Tribune they were working toward a mixed-use, multifamily project with a possible boutique hotel component.

The following year, a pre-app was filed with the city’s Planning Department for a 12-story, 230-unit apartment project, with 154 parking stalls, at an estimated cost of $60 million.

Shawn Adkins with Forbes Development Group/42 Park Mall Holdings told The News Tribune this week that plans stalled and the potential to sell the property emerged.

“Our plan was for a new mid-rise apartment building with approximately 300-310 units, of which we had been in negotiations with a potential joint venture partner to build this project out,” Adkins said via email. “Those talks had stalled with the party when this offer to purchase was brought to us.”

Adkins noted the appeal of the site as an Opportunity Zone development site. Opportunity zone projects offer tax advantages, where investors can defer and potentially lower their capital-gains taxes in exchange for the investment.

Adkins said he doesn’t know what’s next for the site with the new owner.

“We have never spoken directly with them, so we are not sure,” he wrote.

What’s next for one tenant, former building owner

The late 1970’s-era building has been home to various tenants, including Kantor Diamond. It is in view of Macy’s at the mall and across the street from Buffalo Wild Wings restaurant.

Michelle Kantor of Kantor Diamond told The News Tribune that her business will soon be moving.

“We had been seeking other space, not only because we heard the sale was coming, but to provide our clients with a more secure, private buying experience,” Kantor wrote.

“We are happy to be moving to the fifth floor of the Tacoma Mall Office Building (4301 S. Pine St.) and have already secured a lease there. We will be open Feb. 1 in our new location,” Kantor added.

As for what’s next for Adkins and his group, he told The News Tribune that they are now planning a South Hill Mall area project in Puyallup.

“We are planning for approximately 111 new apartment units that we are in the early stages of designing. My partner John Lewis and I have been strategically focusing on these mall development sites because of their superior demographics, amenities, supporting businesses, jobs and services as well as transportation.”

He added,“... we strongly believe that these mall properties will become the new downtown centers of their own for new growth, especially for much needed new housing units.”

News of the Tacoma building’s sale was first reported this week in the Seattle Daily Journal of Commerce.