Specialty: Multi-family housing
Principals: Donald A. Simpson, J. Robert Love, Jerome Siegman, Marc Pinto and Michael Costa
Year founded: 1948
Local office: Seattle
Largest regional project in 2002: The Timbers at Issaquah Ridge, a 337-unit apartment development
Times are tough most everywhere for real estate development, and in Seattle they’re especially difficult. Simpson Housing is feeling the pain.
What Senior Vice President of Development Operations Paul Herskowitz said had been a development staff of eight in Seattle is now three. Herskowitz, who opened Simpson’s Seattle office in 1992 and ran it for seven years, again is overseeing the Seattle office but from Simpson’s headquarters in Denver, where he said staff also has been reduced. In Seattle, he takes over for Greg Arms, who Herskowitz said went to work for Washington Holdings in Seattle.
“Everything is a challenge nationally,” Herskowitz said. He noted that in Seattle, the company felt it was diverse enough until the effects of 9/11 and the recession hit the aerospace and high-tech industries.
Simpson thought its geographic diversity would shield it, too. Then telecommunications got hit, hurting the company in its own back yard: Denver.
“It’s just been tough all over.”
Despite the slowdown, Simpson has had some successes and is planning projects, even in the Northwest. Each project is in its own submarket, Herskowitz explained. Some projects in Seattle haven’t done so well. “But you go down to Puyallup and we’ve had some projects that have just done fantastic.”
In the Northwest, Simpson has two projects planned: the 222-apartment Neptune on Seattle’s South Lake Union and the 400-unit apartment Club 1201, which is next to a light rail station in the Portland suburb of Hillsborough.
Simpson’s investment committee still must give the Neptune the final OK. The group already has provided preliminary approval, and Herskowitz thinks it will do so again. He says construction could begin about June 1. He added that Simpson likely will hire W.G. Clark Construction Co. as the construction manager.
Analysis of Club 1201, which is the second phase of the project, has just begin. Simpson already owns the land and is trying to figure out the best way to use it. Once the company figures that out, it will have to get permits. Said Herskowitz: “It’ll take just a little while.”
The first phase of the Hillsborough project was condos, but don’t look for Simpson to do much more condo development. The board decided two years ago to finish condo projects and focus on apartments because, Herskowitz said, condos are not the company’s forte.
When will the market come back? Based on conversations he has had, Herskowitz thinks it will be in 2004 in Seattle. “Everybody thinks in 2004 it will start getting better. Some markets it will take until 2005.” Some of Simpson’s Seattle-area properties “are doing a little better than they had been before,” said Herskowitz, who cautioned: “It’s still going to be a little tough.”
Factors to watch are interest rates and job growth, he added.
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