Wright Runstad

Specialty: Large-scale office building development and management
Management: Jon Runstad, chair and CEO; Gregory Johnson, president
Year founded: 1972
Largest recent deal: Lease with Davis Wright Tremaine to fill space that Washington Mutual will vacate in the WaMu Tower in 2006

Jon Runstad, chair and CEO of Wright Runstad & Co., says the firm is doing well in the economic down cycle by developing properties for government agencies.

“We’re filling in the down cycle with good productive work in the build-to-suit arena,” he says. The firm has no plans to develop any private office buildings as investments.

“The market just isn’t there for that,” says Runstad. “You really have to see increasing rental rates before you can support new development.”

Buildings that Wright Runstad owns or manages are substantially full. Washington Mutual Tower, for example, is 98.7 percent occupied.

But when the new WaMu tower (which is not a Wright Runstad project) opens in 2006, it will vacate a lot of space in other downtown buildings.

In the face of lackluster demand, the firm is concentrating its efforts on developing three government buildings: a new city hall for Redmond, the Tumwater state office building, and a new office building for King County in downtown Seattle. It’s developing these buildings using “6320” financing. Specially created, tax-exempt nonprofit organizations finance the developments. The arrangements allow government agencies to take advantage of their tax-exempt status while having a private entity develop properties for them.

“They’re really getting the best of both worlds,” says Runstad.

Even back in the go-go days of the dot-com explosion, Wright Runstad never had more than six projects in the works at any given time. It prefers to concentrate on a small number of large projects.

On the government front, Runstad is avidly watching potential changes to land-use regulations in downtown Seattle and the congestion and disruption that are likely to occur as major transportation projects — light-rail, monorail and replacing the Alaskan Way Viaduct — converge on downtown in years ahead.

“We’re going to have to work harder as a community to mitigate those impacts,” he says.