Sleepless in Seattle: The Martin Selig Story

Summary

The Promote Podcast: "Sleepless in Seattle: The Martin Selig Story"

December 3, 2025 | Hosted by Hiten Samtani & Will Krasne

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Episode Overview

This episode of The Promote Podcast delivers a deep dive into the rise and recent fall of Martin Selig, the flamboyant, risk-loving real estate developer who once dominated Seattle’s skyline. Samtani and Krasne trace Selig’s family legacy from a harrowing escape from the Holocaust to building—then losing—a vast commercial real estate empire. The story captures themes of high-stakes risk, myth vs. reality in development, and the cruel realities facing office landlords in the post-pandemic era.

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Key Discussion Points & Insights

1. The Selig Legacy: From Immigrant Roots to Skyscraper Empire

• Selig's father, Manfred, fled the Holocaust and arrived in Seattle in 1940 with "only a few gold coins in the hollowed out heels of his shoes" ([00:25]).
• Martin Selig inherited his father’s ambition, entering real estate in the 1960s, buying his first property in college with 100% leverage ([04:23]), foreshadowing lifelong risk appetite.

2. Building the Empire — 'Man in Full' and the Art of Survival

• Martin Selig grew his portfolio from suburban shopping centers to dominating downtown Seattle, leveraging building codes for unprecedented density ([05:03], [05:41]).
• On risk-taking: "Martin Selig built a skyscraper empire of epic proportions with no partners except for God's good humor. And every time he was in a jam, he houdinied his way out until he couldn't" ([00:47]).

3. The Columbia Center Gambit

• Selig's defining project was the 76-story Columbia Center, financed by a $200 million construction loan at an eye-watering 18% interest—all on spec ([07:16]-[07:38]).
  • “A lot better than my bankers,” Selig quipped when asked how he slept at night ([07:42]).
• Selig sold the tower for $350 million to “keep everything else afloat” ([08:32]), highlighting his willingness to sacrifice icons to stay in the game.

4. Operating Style: Asset Management, Hustle, and No Partners

• He personified hands-on management: no committees, no brochures—Selig made calls and showed up in person ([09:26]-[09:40]).
• "He was his own primary leasing broker. He was the Steve Durell to his own Mark Holliday" ([09:53]).
• Unlike most developers, he refused outside partners, amassing massive projects on his own balance sheet ([12:00]).

5. Gambling with Leverage and the 60% LTV 'Myth'

• Selig claimed a personal 60% loan-to-value cap, but hosts see this as “the most bullshit thing I've ever heard in my entire life” ([12:39]).
• The 'V' in LTV is “fungible”—what mattered was survival, not prudent permanent finance ([13:07]).

6. Daredevil Persona and Appetite for Risk

• Described as a ‘daredevil skier who smoked stogies, had this exotic art collection on display’—Selig embodied risk in life and work ([13:20]-[14:00]).
• Contrasted with other developers who lead quiet lives; Selig “fucking lived, dude” ([13:20]).

7. Surviving Downturns and Cockroach Resilience

• In the 1990s, Selig faced foreclosures and lawsuits, even neglecting to pay a $600k power bill ([14:47]-[14:58]).
• Comparison to cockroaches: most successful CRE developers “just stick around. They show up cycle after cycle. They reinvent themselves” ([15:28]).

8. Creative (and Ruthless) Leasing Tactics

• Selig was relentless in chasing tenants, including suing the EPA for overlooking his bid—eventually filling two-thirds of a building with the GSA at below-market rent ([15:59]-[16:52]).
• Willing to buy tenants out of other landlords’ leases, sometimes taking big risks to fill space, enabling financing ([17:13]-[18:21]).

9. COVID, Structural Shifts, and the Fall

• Seattle’s office sector was hammered by the pandemic; Selig delivered new towers "right into the teeth of it," and vacancy soared ([18:21]-[19:12]).
• “Every single thing that could go wrong did. So it was Murphy's Law…” ([18:38]).
• His class B portfolio was especially vulnerable as class A rents fell, and office fundamentals cratered.

10. The Reckoning: Losses, Reality Distortion, and No Succession

• Selig defaulted on $900 million in loans and lost 19 buildings to lenders or third-party managers ([21:28]-[21:41]).
• "37% of Seattle’s downtown skyline may not be left with very much by the time this is all said and done" ([02:12]).
• His daughter and presumed successor exited the company amid turmoil ([25:08]), leaving open questions about governance and the family legacy.

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Notable Quotes & Memorable Moments

• On sleeping at night with massive debt:
  — "A lot better than my bankers." —Martin Selig (quoted at [07:42])

• On developer resilience:
  — "I think the most successful real estate developers are often cockroaches. You can't kill them. You just stick around. They show up cycle after cycle." —Hiten Samtani ([15:28])

• On portfolio management and lost opportunity:
  — "Every day you're not selling, you're buying. And so this guy was buying class B Seattle office basically every day for the last 40 years. And that turned out to be a decent bet until five years ago." —Will Krasne ([24:59])

• On Selig’s motivation:
  — "I think he liked the idea of owning the city. I think that was the drug here." —Hiten Samtani ([27:22])

• On relentless, hands-on approach:
  — "There’s no brochures. He has voicemail, and he was showing up at people’s offices...He was his own primary leasing broker." —Hiten Samtani ([09:40]-[09:53])

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Important Segment Timestamps

• Origin Story & Family Background: [00:05]–[04:02]
• Early Deals & Risk Appetite: [04:02]–[07:16]
• Columbia Center Development: [07:16]–[08:54]
• Leasing/Asset Management Style: [09:26]–[10:51]
• Leverage & Myth-Building: [12:00]–[13:07]
• Surviving Downturns: [14:46]–[15:35]
• Creative Leasing Tactics: [15:56]–[18:21]
• Pandemic & Office Collapse: [18:21]–[20:22]
• Losses, Succession, and Reflection: [21:28]–[27:42]

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Overall Takeaways

• Martin Selig was a generational outlier—risk-taking to the core, always thinking tactically, and playing to survive another day, but ultimately undone by a combination of market collapse, structural change in office demand, and lack of succession planning.
• His story illustrates both the genius and fragility of the lone-wolf American developer—and, as the hosts note, “top ticking” or knowing when to sell is as important as building.
• The episode maintains an irreverent, insider tone, full of CRE war stories, sharp banter, and references that reward industry-savvy listeners.

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For additional market insights, war stories, and more, visit thepromote.com.

Transcript

[A]

If October 14, 1940, had been a cloudy day in Seattle, Manfred Selig would have floated down the coast of San Francisco in his flight from the Holocaust.

[B]

But on that fine fall morning, the sun was shining, the birds were chirping, and so a man got off a ship and made the Emerald City his home.

[A]

He came to America with only a few gold coins in the hollowed out heels of his shoes. His son Martin, who was just four at the time, later recalled. It was a pretty auspicious decision because Manfred, well, he built a pretty good life for himself and his family in Seattle. And his son Martin went on to become the most dominant developer in the city's history. A man in full if there ever was one.

[B]

Martin Selig built a skyscraper empire of epic proportions with no partners except for God's good humor. And every time he was in a jam, he houdinied his way out until he couldn't.

[A]

Until he couldn't. Welcome back to the promote podcast, your insider guide to the money and mania of the CRE markets. I'm Hitan Sumtani.

[B]

And I'm Will Krasnyy.

[A]

Hope you guys had a happy Thanksgiving. We have a really, really fun post holiday episode here for you.

[B]

Not fun if you're a member of the Selig family.

[A]

This is true.

[B]

Had a good run for a long time.

[A]

A fantastic run for pretty damn long. We're gonna dive deep into the rise, rise and fall of Martin Selig, an extraordinary character with an extraordinary appetite for risk who shaped the city to his will and became a billionaire in the process. He had it all. He hubris, pluck, chutzpah, tenacity, and a pretty damn masterful understanding of the dark arts of development. But as our man Rocky says in.

[B]

Creed, time beat him. Time takes everybody out. It's undefeated. As of this summer, sale has lost 19 of his buildings. The fact that he had 19 buildings to lose is kind of incredible, either to third party managers or his lenders. And he's been unable to make good on over $800 million worth of loans.

[A]

A man who once owned 37%. That's insanity. 37% of Seattle's downtown skyline may not be left with very much by the time this is all said and done. It's kind of a unique combo of horrible market and a very quirky way that Selig chose to build his empire. We're going to get into all of.

[B]

It, but first, if you haven't read the stone cold banger on 8:45 third, that dropped on The Promote Insider last Wednesday, and it was excellent.

[A]

Thank you.

[B]

Hit pause, go sign up and read it right this minute. It's a deep dive into a live deal on a Manhattan cap stack. And it's pretty, pretty good content.

[A]

You know, we were hit with both the OM and the lender model. That doesn't happen very often. It's a pretty rare treat.

[B]

Let me guess. The numbers tied perfectly.

[A]

It's to a T. You can sign up [e-mail] upgrade and check it out. Annual memberships are $275, or you can do month to month for 30 bucks. Also, brands, hit us [e-mail] to reach the most devoted audience in CRE. Lenders, builders, brokers nationally. They're all tuning in.

[B]

We are CRE's water cooler. And you want to be in the discussion. All right, let's talk Martin Selig. And let's go back back to the beginning, as Hilary Duff would say.

[A]

I was going to say James Lipton. Did you know he was a pimpin in the former life before he became an interviewer, he ran a bordello in Paris.

[B]

I believe that. Keep my damn name out your mouth.

[A]

All right? I think we have been accused, rightly so, of not paying attention to certain markets, but, man, Seattle's got some tails, this dude is. When we talk of a man in full, Tom Cousins, Steve Ross. Like, I would put this guy way up in the conversation, man.

[B]

We talked about the cowboys who don't really exist anymore. And this guy was a cowboy for of all the cowboys. I take a lot of risk, Calculated risk, of course, but some of this in here, reading these articles, I got the shakes.

[A]

Extraordinary series of things that Selig did. So let's start at the beginning. We talked about his. His father, Holocaust survivor Manfred Selig, comes to Seattle, sets up a shop. By all accounts, is a successful businessman, but, like, you know, just making a living. And then his son really ramps it up. In the 60s, he gets into shopping center development.

[B]

Even before that, when he was still in college, I think he bought his first deal as a collegiate student, and he borrowed.

[A]

Isn't this like a prereq at this point for a titan?

[B]

Yeah, he borrowed the down payment from everyone. So 100% leverage. Sold it in a year for a handsome profit. I love all those stories, too, when it just sort of like yada yada is how he actually did it. And it's like, oh, he sold it in a year for a handsome profit. I mean, he probably paid like $4,000 and sold it for 4,700.

[A]

But still it's the principle and the takeaway. Right. Take risk, get reward. I think that's what applies throughout.

[B]

You gotta start early. The sickness comes early.

[A]

Yeah. So he's in shopping centers, does that for a decade or so. And in the 70s he really gets in earnest. He gets into office development.

[B]

Right.

[A]

In a city that's coming into its own Seattle.

[B]

He really does it from the outside in. He starts with sort of suburban shopping centers. Suburban office. So ugly. Kind of like the low slung type things that you see in any business park. And then he builds Darth Vader. We're getting ahead of ourselves a little bit. But I think in one of the ways that developers really make their bones is you find a little arbitrage or a little cheat code. His cheat code was the building code in Seattle in the 1970s which allowed for this crazy amount of density.

[A]

You remember Al Pacino's character in Glengarry.

[B]

Glen Ross, Ricky Roma, number one sales guy in the office.

[A]

He had a line. It's an opportunity.

[B]

An opportunity to what? To make money perhaps.

[A]

And that's what Selig said here too. He said that of the building code that was enforced in the late 1970s, I wanted to build a maximum building that I could build. Kind of rhymes with what happened with 15 CPW and the, you know, the townhouse and the building structure.

[B]

Two buildings to maximize their density.

[A]

Exactly.

[B]

But yeah, what I would also say too is that I don't think there were a lot of people looking to build 1.5 million square foot towers in Seattle like pre Microsoft. And it's sort of like replacement cost. Sometimes it doesn't matter because if no one wants to replace it, what does it matter what the replacement cost is? It's like no one really wanted to build this much square footage. That was really unknown territory at that time.

[A]

Yeah, Seattle was like a decidedly tier two city.

[B]

You had Nordstrom, Microsoft, Amazon, Craig McCall, McCall Seller. He was like the richest guy in the United States for 10 minutes in the tech boom. So you have all of this commerce. But when he's doing this in the 1970s, I mean it's like pre Frasier Frazier still lived in Boston. Everybody Wang Chung tonight.

[A]

This reminds me of like when a product is so completely out of whack with the skyline, this is never going to be built. So I'm just saying it for fun. But you know that Oklahoma super tall they're talking about?

[B]

You've little faith.

[A]

Anyway, so the Risk appetite. That was needed here is kind of a theme that recurs throughout Martin's career. Do you want to talk a little bit about the loan that he took to develop the Columbia Center?

[B]

Jesus Christ. Yeah. So to develop Columbia center, the project that really put him on the map, he has some line about how the Space Needle let people know where Seattle is, and the Columbia center will let them know what it's about. He took a $200 million construction loan, which is a big loan today.

[A]

Yeah, it is. Even now, it's big, right?

[B]

At 18% interest on spec. First of all, who wrote this?

[A]

LO Children's Investment Fund wasn't even about it.

[B]

So he has a line. Not about this product, but later, when someone asks him in an interview, how do you sleep? And he goes, a lot better than my bankers.

[A]

Again, Mad in full. And just to bring up another man in full, because this is the kind of the recurring theme that makes these characters so memorable for us. There's an iconic line from probably the quintessential mad in Full, Big Bill Zeckendorf.

[B]

He famously said, I'd rather be alive at 18% than dead at the prime rate. Can I just say, I never understood that? Because it's always better to be alive than dead. Sometimes dead is better.

[A]

Sometimes you go with the vibe. Not fair enough. So in 1984, he completes Columbia Seafare Center. 76 stories. It's the city's tallest tower. This tells the rest of the world that something's going on here, is what Selig said of his project. But four years later, he's out. He sells the building for just 350 million. What's up with that?

[B]

I don't know why you say just 350. I mean, he cashed out $100 million to keep everything else afloat. I think that's a pretty big.

[A]

You don't build something like that to get out.

[B]

You do if you're an institution. But no, this guy, this was gonna be. Frankly, I'm surprised he didn't call it the ceiling center. But it kept everything else afloat because he was in big trouble elsewhere, which sort of becomes a recurring theme.

[A]

What's the Farsi saying? Your eyes are bigger than your stomach?

[B]

Or is it saying Top Gun, your ego is writing checks your body can't cash?

[A]

Exactly. But again, this is the start of a pattern for Selig. He's a survivor, unlike a lot of other developers, kind of get sentimental about their holdings. He does what he needs to do to move on. Right. He will cut deals with tenants. He will load them up with TIs and concessions, et cetera. He will do what he needs to do. He's not precious about the operations as much as he is precious about kind of just getting up and showing up to fight the next day.

[B]

He also doesn't have committees to have more committees about having committees about what type of tenet we should have. He was calling people directly. In all of these stories they talk about, there's no brochures. He has voicemail, and he was showing.

[A]

Up at people's offices again. There is some myth building involved in these things, right? Over years, of course. Right. But let's say we take them at somewhat face value. He was his own primary leasing broker. He was the Steve Durell to his own Mark Holliday, let's say.

[B]

Yeah. A lot of the people who are great developers often are notoriously terrible asset managers. So the ones that come to mind are the Reichmans who built Battery Park.

[A]

City, Canary Wharf, Brookfield Place, there's a.

[B]

Tower in Toronto where they really made their bones. And I remember reading the books about them, and they're like, notoriously terrible at asset management.

[A]

I'm gonna put them on the holiday gift guy. They're so good. They're just timeless books.

[B]

Yeah, yeah. Selig understood. He's like, I need people in these buildings to pay me money to build more buildings. He was willing to undercut people on rents to get them in. He wasn't working this thing to maximize his irr. He just needed to stay alive. It's binary. He's dead or alive, gonna do whatever he had to do. He's gonna sell his soul into horcruxes like Voldemort to stay alive, which a lot of people wouldn't do. A great example is like 60 guilders with Carlisle in Soho on their retail that stayed vacant forever. Cause they paid such a high price that they had to get a massive rent. They couldn't just backfill. It's not like they never had any interest. They just never had any interest. At $9,000 a foot, that venture did.

[A]

Not go so well, huh?

[B]

No. But for Selig, it's just, if I can get people in here and survive, I believe in the market, and I believe that the dynamism of Seattle, which is proven out with all the huge companies that were fostered there. I'll be okay. And a lot of times he built stuff spec. He didn't pre lease it, but got leases three years later after a bunch of rent growth, was able to do better.

[A]

Also, some. Some pretty interesting tactics which we'll get into in a second. But to your point, just to kind of sum it up, it's like I'm going to be very tactical and trench warfare y about the micro and hope that the macro will kind of come in and save me when the time's right.

[B]

For sure. If you're in a gateway market, generally the stuff goes up and to the right. May not go in a straight line, but it generally does that. And if you were to say, hey, I'm going to be developing in a city that's going to have two of the four biggest companies in the world headquartered there, generally it'd be okay.

[A]

Think about this, though. A lot of these developers that we talk about tend to tie up with other institutions. The guy had zero outside partners for such immensely massive projects. Think of how crazy that is.

[B]

It's totally nuts.

[A]

We've talked in a previous episode about relateds de risking of Hudson Yards, in contrast, right? Every step of the way, every time they develop something, they bring in the National Pension Service of Korea, they bring in Heinz, they bring in xyz, and pretty soon they've taken enough chips off the table that they can keep going. Decidedly not the case here, right?

[B]

It's just him. And he made enough money early on that he was able to do these projects himself. And then size gets size and gets a $200 million construction loan. I don't know what it costs to. I don't know how much equity he put into Columbia Seafirst Center.

[A]

So back to the myth building here. At some point, he establishes that max 60% LTV is his rule. And he says the following.

[B]

The most bullshit thing I've ever heard in my entire life.

[A]

Complete nonsense. But he says that leaves you a lot of room to maneuver.

[B]

Don't mean to cash dispersions on people, but there's a group out there that says, we like to invest the old families in real estate. And then I remember talking to one of the families that's like we were max leverage, max IO. We're 100% LTV, as much as we can get before the SNL crisis. Always max.

[A]

There's almost a mantra in real estate, right? Never go full Reichman. There's a reason that exists.

[B]

The last thing I would say about the 60% LTV is that I think a lot of existing loans, people would say, oh yeah, we're really protected. V is always fungible. Always remember that the V is fungible. It can go down.

[A]

There's a quirk of DNA. You have this unbelievable ability to take risk. We've talked about Gary Barnett and having it. What's interesting about Gary Barnett, though, the chutzpah and the audacity shown in the business is not at all visible in the real life, right? He lives in somewhere in Queens in a single family house. Very, very nondescript life. This guy, though. This guy fucking lived, dude. He was a daredevil skier who smoked stogies, had this exotic art collection on display. And this reminds me, remember when we talked about Tom Cousins? He was a pilot as well, and he would just, like, maverick style, zoom in and out of stuff. It's kind of like this guy. Like, people who have just innate risk taking can apply it to their businesses.

[B]

I guess you're born with this gene or you aren't. And I think it extended to all aspects of his life, though. It's very funny that he was very private about his family life. I mean, he never spoke about that. He also never spoke about his debt. That was the two things that were off limits, apparently.

[A]

And the family life is a factor later on. But, yeah, imagine when the city's vacancy rate was 15%, which is pretty damn scary. It's higher than that. Now, Mr. Selig said he does not expect any problems filling the new building because, quote, we've never had any trouble before. Confirmation bias, baby.

[B]

Well, I was gonna say, what's that thing about the turkeys where they're like 364 days a year? It's a great day to be a turkey.

[A]

Good Thanksgiving timing here. So he spends much of the 90s kind of going through the usual. Let's talk a little bit about that.

[B]

Who among us.

[A]

Foreclosures, bankruptcies, cut rate deals with tenants, receivership, lawsuits, liens.

[B]

He didn't pay his power bill.

[A]

I think the bill was at a 600k or so.

[B]

This is sort of emblematic of a guy versus an institution, because an institution knows in all their loan docs like, well, you got to pay your power bill. Like, you got to do all these. And this guy's just like. I mean, he's like, I don't have the money. What are you gonna do?

[A]

Let's go to the animal kingdom for a second. Real estate developers like to think of themselves as tigers or lions, right? Hunting, et cetera. I think the most successful real estate developers are often cockroaches.

[B]

You can't kill them.

[A]

You can't kill them. You just stick around. They show up cycle after cycle. They reinvent themselves. They do their thing.

[B]

Most of them survive off of fees and they put in their own capital. This guy's the exact opposite.

[A]

Yeah, but by 2010, he's once again looking like a king. I think vacancy rates are what, in the single digits or so.

[B]

Single digits for him and double digits for everybody else. Champagne for my real friends. Real pain for my sham friends.

[A]

We should talk specifically about this deal, the one with the gsa.

[B]

We talked about how he would really hustle to get tenants. And so for one of his buildings, he wanted to get the epa.

[A]

Environmental Protection Agency.

[B]

Right, exactly. And so they decided to stay put. A lesser man might have said, gosh darn it lost out on that one. What are we going to do?

[A]

I missed out on the government tenant. We'll catch him on the next round.

[B]

He sued and claimed that the agency didn't give other bids for space. A fair shake because again, know that he is the one man committee. He doesn't need to make a 19 IRR. He can just needs to stay alive. And so he offered much cheaper rent that they overlooked. And so the EPA ended up not coming. They did stay put, however, the federal government decided, you know what? We need more space for other departments at this very cheap rent. And so the Government Services Agency came.

[A]

Not just came to this building. They took the freaking. They took two thirds of the building.

[B]

It came out in public filings that the rent that he offered the GSA was like meaningfully lower than what they were paying elsewhere. He just needs to be alive. And it's sort of, you know, like Hannah Horvath and girls, you know, it's a Wednesday night, baby, and I'm alive. He also did another Reichman thing. He would take over someone else's lease. So he'd go to your building and say, you know what? I'll pay your rent there if you come to my building.

[A]

Some of those don't work out too well for him in the end.

[B]

Well, it depends if someone's.

[A]

But what is the end is the question, right?

[B]

Yeah. What is the end? It can be a good move because if it allows you to get something financed and you get way more money out of it, what do you care about this other thing? And then, by the way, let that landlord, if you default, let that landlord come after you. What are they going to do?

[A]

This is true. I think this is something I'm still learning about the real estate business. It's like you can't evaluate things in a straight line. There's always perverse, hidden incentives for so much of this. We've talked a lot about how many of the fund manager decisions or allocator decisions are all about saving face. Right. It's got nothing to do with the actual investment in front of you at the time. I'm getting a deeper appreciation for these side objectives.

[B]

There's the game, and then there's levels to it. And. And for a guy like that, if you say that is insane, why would you agree to pay 3 million a year taking over this guy's office lease? Well, because over here, that's the last piece of the jigsaw to get this thing financed. I'm going to cash out this much money and, like, what do I care about this lease? It's things like that where you look at the deal in the field and you might say, this doesn't make any sense. But if you zoom out across the global perspective, makes all sense in the world.

[A]

So we're talking global perspective. Let's talk about the Black Swan, macro shock, what have you. The pandemic hits. Seattle's hit really, really, really badly and honestly has not come back. Martin Selig, caught right in the middle of it.

[B]

Yeah, he delivered two buildings right into the teeth of it, which were empty, rough, and remain mostly empty years later. Yeah, basically every single thing that could go wrong did. So it was Murphy's Law, where the new stuff he was delivering didn't lease. And then, because class A stuff was so vacant, Seattle was one of the last markets to come back from work, from home. All of the class A stuff is dropping their rents, and then the value proposition goes away.

[A]

Of the class B, which is decidedly. Martin Selig's buildings were decidedly. Often class B buildings. Right.

[B]

Well, you know, we've just talked about this guy. This guy's 88 years old, or whatever he is. He's building one building a year for 50 years.

[A]

We didn't highlight that level of prolificness. It's unbelievable. One tower a year is insane.

[B]

I mean, he basically had Irish twins for 40 years.

[A]

So things are going downhill pretty fast. He loses seven buildings in a credit bid. One go, he loses another chunk. But you can see that there is a bit of a reality distortion field around Selig. Again, when you're a man of this stature, and there's very few of this stature, you're kind of not used to being challenged in this way. Covid comes along, 2023, gives an interview to the Seattle Times, and he says the following. By the end of next year, you'll see five days a week. Boom. He just assumed that this was going to happen for all his buildings. Wasn't the case. And again, this is all happening. The capital markets are getting impatient.

[B]

You can term out your debt all you want, but if these things take three, four, five years, you end up running into the maturity date. And we talk about the wall maturities and how it's been overblown, and it's just nonsense, and everyone's talking about it. It's not nonsense if you own a huge chunk of Seattle Class B office.

[A]

That's correct. And as of 2023, his vacancy rate was 19%. And it just kind of kept going. Every second headline on Selig is a.

[B]

Bad headline now and again. This is one guy. It's his balance sheet. And so, yeah, there's a ton of equity in these buildings. It's not always that easy to get.

[A]

Say more on that.

[B]

If you have a CMBS loan on a property and you think, you know, it's 65% LTV that 35, you can't just go turn the cash. You got to sell the building or you got to refinance it, in which, in this case, the buildings are worth significantly less.

[A]

This is a really good comp for context. Have you heard of Trumbull Property Fund?

[B]

Oh, yeah. That was the UBS vehicle.

[A]

They had a 630,000 square foot tower in Century Square. Again, same kind of ceelig location. The bids that are coming are at 65 a foot. 65 a foot? Yeah. It's really, really rough. Do you want to take a shot at the valuation that they were banding about just a few years ago?

[B]

I don't know.

[A]

700.

[B]

Jesus Christ.

[A]

They were valuing this at 700 a foot just a couple years ago, and now it's at 65 a foot.

[B]

The V is fungible.

[A]

The V is fungible. So as of this summer, Selig's lost 19 buildings. So either outside management turned over to lenders, and we're talking about close to $900 million in loans that he couldn't make good on.

[B]

This is just his balance sheet. So you have two buildings that are vacant, which is what happened. They cost between construction, interest, you're still paying property taxes, you're still paying insurance, you're still paying utilities. Can't turn the heat off, though, as much as he tried in the 90s. So you're losing tens of millions of dollars a year. This whole portfolio. 5 million square feet, let's call it. Right. What's the NOI per foot? I don't know. 10 bucks? No.

[A]

50 million a year pulling in.

[B]

Let's be generous, let's call it 20. So it's 100 million a year. Right. That's noi not free cash flow. You still got leasing commissions, TI's CapEx debt service and interest expense. So realistically, he was taking home 20.

[A]

It's not nothing.

[B]

No, it's not nothing. But if you have two vacant office buildings that cost you more than that, then yeah, it's something.

[A]

If you had to visualize this or create a metaphor for the way that he's running his business over these years, I think of related, for example, is continuously taking chips off the table while betting other chips.

[B]

You want to say house of cards is too reductive. But he made it through so many downturns. I mean, three basically, before. So I understand going into this one why he would say, I can do this, because he's done it. But the difference here is that there's a structural shift, and that wasn't the case before. Those were capital markets issues. Correct. This is like a structural shift in what? Are people going to go to the office?

[A]

Exactly. The existential question of the asset that he's basically spent most of his life and career on, there's a big question mark on the viability of that asset in this market. Class B giant office building. Right. And as of September, 37% of office space in Seattle's CBD was either vacant or available on the sublease market, according to Cushman. Gives you a sense of how gigantic this problem is.

[B]

We talked about how he would really hustle and worked as an asset manager. Manager. But you also have to be a portfolio manager, because think of it this way, all the buildings he built at one point were class A. Yeah.

[A]

They were capex renovations. You got to spruce them up.

[B]

Yeah. 30 years later, they're not. And instead of saying, you know what, let's take advantage of really tight cap rates. I'm sure there was a point in time where he could have printed a number here. I mean, he could have printed 4 billion, 3 billion, something like that.

[A]

You're saying he could have gone to like a, a Blackstone and said, take me out. Yeah, I'm in my 80s. I'm ready to go.

[B]

I mean, there were guys, we talked about Ned speaker on the west coast, like all of these different little pot. Like there are guys like this in Boston. There are guys like Chicago.

[A]

Say more about Ned. I'm not sure all our listeners will be familiar.

[B]

Speaker properties sold. I think the eop and he negotiated a tax Protection agreement.

[A]

This is fantastic.

[B]

EOP goes, we're the biggest, baddest guy in the jungle. We're like Taruk Maktou from Avatar. Why would he ever look up? It's like no one's ever going to buy us. So we can just give on this tax protection agreement and like, whoops, along came Blackstone. Yeah, along came Blackstone. And Speaker's like, yo, I need nine figures of few hundred million to cover my tax distro.

[A]

But like again, this is one of the things when we talk about the legacy of titans, one of the things that pops up for the absolute goats, the Samsels, et cetera, is top ticking, right? Top ticking is such a part of it is luck, part of it is instinct. A lot of it is luck, more than they might admit. But top ticking is such a fundamental part of the lore of these people, right?

[B]

Yeah. Every day you're not selling, you're buying. And so this guy was buying class B Seattle office basically every day for the last 40 years. And that turned out to be a decent bet until five years ago.

[A]

He's well into his 90s. His daughter was supposed to be a successor. She left the firm in kind of murky circumstances. I want to say last year or early this year.

[B]

Who knows what those loan docs say? I mean there are reasons for all of this. That would be my guess. But again, are there.

[A]

We haven't seen anything or I don't know if it's come out or anything. There's no PG type of situations here. Unless he's calling hard money lenders.

[B]

Well, I mean, CMBS is definitionally non recourse, so he's fine there. He's just, you know, losing the buildings and there's no equity. But yeah, it doesn't seem to be pg. I would be stunned if there weren't.

[A]

He sold a couple of personal properties, by the way. I don't know if it's related to his financial troubles or just him being in his 90s.

[B]

Or is it like Ron Perlman saying, I want to live a less leveraged life. Talk about bad boy carve outs. Like sometimes you have to have a net worth covenant or something in there, which he definitely triggered. Again, this is all speculation, but there are ways in which he could be in real serious trouble that it may make sense for his daughter to leave.

[A]

Trouble is a relative term, right? The man's in his 90s. What are you going to do? I mean, he's hopefully lives till 100 and even more, but like he's had his run.

[B]

It's like Jimmy Cayne when Bear Stern's stock went in the toilet. Someone asked him, you know, you've lost so much money? And he goes, well, it doesn't really impact my life at all. Only people impact are my heirs.

[A]

So what are your takeaways here? Is it hubris? Is it confirmation bias? Is it just a gangster life?

[B]

It's a sickness. This guy kept going. At any point, had he just stopped and either printed a sale or had he pruned his portfolio over time, or God forbid, he had been like an angel investor in Starbucks. I don't want to plug other podcasts on here, but there's an incredible episode of Acquired about Starbucks where Howard Schultz is running around trying to buy Starbucks and he's raising checks. And he goes to all the titans of Seattle business. I'm sure Martin Selig got a call.

[A]

Yeah, just like we talked about with Tom Cousins. If you're a wealthy guy and wanted to do something of note in Atlanta, you would go see Mr. Tom Cousins. Selig was probably in the mix with all this stuff. He probably had many, many, many opportunities to make a lot of money outside of this portf or sell this portfolio and move on to something else. It comes back to something that he said when this whole 37% stat came up, he said with a chuckle, it's like it's more than that. I think he liked the idea of owning the city. I think that was the drug here.

[B]

In one of the articles, the Seattle property owner was quoted as saying something like, seattle used to be a local real estate group. You could walk down fourth Avenue and you'd run into the guys who owned all the buildings. That's not the case anymore. Except for Martin.

[A]

That's so cool. I'm just. I love that. That's it for the promote podcast this week. It's rare that you get to see the full arc of a glittering skyscraper king career like this. So really enjoyed this one and I hope you guys did too. I would normally say the following. We'll be back next week with more cre Insider goodness.

[B]

But in this case, we've got a little bit of a special treat for you. In a horrific piece of judgment. Haten, let me record by myself. And our mailbag episode drops on Friday. And I had fun.

[A]

You did great. You were wonderful. Except that I should say listeners, he calls A.B. rosen, Abbay Rosen, which in this business is like a capital punishment worthy crime. But listen, besides that, he did wonder.

[B]

Well, this is a true piece of feedback that I got from a 10. Great tape. Except we can absolutely not publish a huge piece of it because I think there are going to be legal ramifications for you.

[A]

Yes, it's true. So we're not going to publish that part. But I hold it in my heart. Remember brands? We'[e-mail] for advertising. And for those who want to go deeper down the CRE rabbit hole, check out thepromote.com upgrade for the Promote Insider. That's our promotion premium tier.

[B]

At $30 a month, it's a quarter of my Celsius budget. Actually. No, it's not. I get the 12 pack of Celsius. It's 22 bucks at Fresh Market in Rehoboth, so it's 44 bucks. So 75% of my Celsius budget.

[A]

Still a great deal.

[B]

Great deal.

[A]

I'll see you back next week, dude. Thanks so much. Take care.

[B]

Take care. Thank you.

[A]

Why'd you do the. Your thank you was creepy.

[B]

I don't know. No, thank you. Thank you. This was fun. Hopefully we still have a podcast after the mailbag airs.

[A]

Ciao.