Commercial Marketplace

The 1980s. It was the best of times that, by the early 1990s, became the worst of times for local real estate developers. Speculative building was considered visionary rather than short-sighted. Tax incentives and speculation on property values gave rise to such economic busts as the AT&T Gateway Tower, and investors and developers took more than a few lumps after plunging into overly-ambitious projects.

Now, just a few years later, Seattle is experiencing another development renaissance. In every part of town, you'll run across one major development project or another. One, and maybe two, new sports stadiums are coming to Pioneer Square. A new symphony hall is going up in the central business district. The north waterfront is in ripe for a major revitalization. And new retail developments have appeared across the city, making rather drastic changes to the landscape and atmosphere of downtown Seattle.

Seattle's Smith Tower

The optimism in the area's economy is contagious. Not only is Seattle and the Puget Sound area seeing growth in retail markets, but residential development is also on the rise. Many analysts are predicting a 10 percent increase in rents and home prices annually for the next two years.

Investors are lined up to back new projects, tenants are looking for more office space and shoppers can't wait to spend their money at the newest retail hot spots. But a nagging question still hovers in the background: How much is too much? How many new stores can downtown Seattle support? How many multiplex theaters can the Seattle market support? Are there enough erstwhile urbanites lurking in the suburbs to fill the many new condominium projects?

Seattle's economy is perhaps as strong and dynamic as any city's in America, thanks largely to Boeing and Microsoft. But have the lessons learned in the 1980s been factored into this new rash of development? Commercial Marketplace, the Daily Journal of Commerce's annual special section on the area's real estate market, plunges into the real estate market and takes inventory of all this hullabaloo to see just how wide our eyes are open this time around.

BRUCE LORIG HAS HAD A LONG AND VARIED CAREER
Developers don't have to build huge skyscrapers to make a lasting imprint on their communities. Like Bruce Lorig, they can take old but interesting buildings, renovate them and convert them to other uses. Or they can construct new buildings -- often urban infill structures -- that complement the neighborhood.

APARTMENT SYNDICATORS ACTIVE AGAIN IN SEATTLE
Apartment syndication, pooling money from groups of investors to finance new development projects, is back in style.

TIGHT MARKET PUTS A NEW SPIN ON SUBLEASING
These days, reports on downtown Seattle's commercial real estate market sound like a broken record. The litany is clear and resounding: this tight market is getting even tighter.

SEATTLE BECOMING A FULL-FLEDGE `RETAIL PHENOMENON'
Seattle's downtown retail core has turned a corner in the last five years, stepping from the brink of blight to the gates of shoppers' heaven.

SNOHOMISH COUNTY'S SHIP HAS FINALLY COME IN
If government officials and business boosters in Snohomish County are pinching themselves these days, it's mostly to make sure that the jump in economic growth isn't just a dream.

INTRACORP ENJOYING THE SUDDEN INTEREST IN SNOHOMISH COUNTY
Like water, real estate development tends to follow the path of least resistance. Where land is available with the right zoning, at the right price, and in the right market, buildings are likely to go.

URBANIZATION COMING TO A SUBURB NEAR YOU
As recently as 10 years ago, you could buy a new, decent-sized house on a quarter-acre lot for a reasonable price in the Seattle area. Those halcyon days are gone forever.

THE CHARMS OF HIGHER DENSITY HOUSING
Prospective home buyers in the Puget Sound region are discovering that their home buying dollar does not purchase nearly as much house as their lifestyles and expectations require.

OFFICE MARKET MOVES SOUTH
We have seen more Eastside and Seattle brokers in the Southend marketplace in the last month and a half than we have seen in the last six years.

WILL THE CURRENT HOTEL BOOM TURN TO A BUST?
A 400-room hotel at the state convention center. A 300-room property at SeaTac Airport. An upscale hotel on the Seattle waterfront. Lodging for extended stays near Seattle Center. These are not stale proposals from the go-go years of the 1980s.

A BULL MARKET FOR SOUTHEND APARTMENTS
Tom Cain takes a look at an overlooked and much maligned area that he thinks will soon yield some impressive returns on apartment investments: South King County.

IT'S A NEW DAY FOR THE SAMIS FOUNDATION
Years ago William Justen was as frustrated and puzzled as anyone by Sam Israel, the eccentric millionaire who owned 42 mostly derelict buildings in the city and who seemed content just to let them rot. Today Justen looks at Israel's portfolio from the inside out, having been handed what for him is a dream assignment: maximize the long-term value of Israel's debt-free and diverse holdings.

CHANGES IN STORE FOR SEATTLE CBD
Demand for office and retail product in downtown Seattle is extraordinarily strong with new development in the retail core already off to a fast start. Office development will likely follow, but in a more orderly fashion than we saw in the last building boom in the 1980s.

HARBOR STEPS FINDS DOWNTOWN LIVING IS HOT
The first phase of the Harbor Steps apartment development helped connect downtown Seattle to the waterfront with its expansive staircase park. Now, with the second phase coming on line, the project is expected to take on a new role -- to help transform downtown into a 24-hour community.

CITY NEEDS TO GET SERIOUS ABOUT HOUSING
The Puget Sound region is slated to see growth of 100,000 jobs over the next few years as well as significant inmigration. We also are in the early stages of massive increases in both rents and prices for housing because of the lack of supply of housing units.

WHO REPRESENTS WHOM: THE NEW LAW OF REAL ESTATE AGENCY AND COMMERCIAL BROKERAGE
The commercial real estate market is hot. But not only is the financial part of commercial real estate changing, but the new Washington State Law of Real Estate Agency is dramatically changing the relationship dynamics between brokers, buyers, tenants, sellers and landlords.

THE 1997 DJC REAL ESTATE INDUSTRY SURVEY
Kauri Investments; Equitable Real Estate; Shorett Kidder Mathews; TRF Management; Colliers; CB Commercial; Craig Kinzer & Company; Nitze-Stagen; Wronsky Gibbons & Riely; Kidder Mathews; Outcalt & Johnson; UW Center for Real Estate; Sabey Corp.; The Retail Group; Spieker Partners; Quadrant; CarrAmerica Realty Corp.

CITY HAS REAL OPPORTUNITY ON THE WATERFRONT
With the completion of the Port of Seattle's Bell Street Pier and Intracorp's Waterfront Landings condominium, 1997 begins a new era of downtown development that will bring about dramatic changes to the Seattle waterfront.

1996 A REMARKABLE YEAR FOR EASTSIDE OFFICE PROPERTIES
The period between 1995 and year-end 1996 produced one of the most dramatic increases in building values that the Eastside has seen. Driven by increasing rents, decreasing tenant improvement costs, commissions and low vacancy rates, property values all over Puget Sound are on the rebound.

CHANGING MARKET DEMANDS NEW APPROACHES
Last year was a terrific time for the Pacific Northwest commercial real estate market and, by all accounts, 1997 forecasts call for continued steady expansion.

DOWNTOWN REAL ESTATE BOOM NOT LIKELY TO BUST
Seattle commercial real estate is booming. Now come the questions about what will happen next. Will this be a boom and bust cycle like the '80s?

FOCUS ON BIG-BOX USERS LEAVES SMALLER TENANTS TO FEND FOR THEMSELVES
"It was frustrating to see all of the availability signs and new construction, yet not find anything suitable for our needs," lamented Bill Clarke, facilities manager for Nissan Motor Corp. (USA).

NEW BROKERAGE RULES MAY PROVE TROUBLESOME
In seeking to avoid liability for representing both buyers and sellers, Washington's real estate brokerage industry negotiated legislation which, while authorizing dual agency, may on balance prove troublesome to the industry.

THE ROOF CAVED IN - NOW WHAT?
Most tenants leasing space in commercial premises carefully review the "deal points" of their lease -- rent, common area charges, term and tenant improvement allowance. But the "What if" provisions in a lease are often not reviewed or negotiated.

YOU CAN'T KEEP A GOOD INVESTMENT DOWN!
The commercial real estate investment market is renowned for the predictability and extremes of its cycles. The most recent example is the dramatic decline and rebound in values for central business district and suburban office buildings.

GOVERNMENT CAN HELP WITH REFINANCING
Under new government initiatives, approximately 3,600 federally subsidized, low-income, multi-family properties nationwide -- and about 2,000 units in Washington state -- have become eligible for mortgage prepayment and conversion to conventional tenancy and financing.