Opus Northwest

Specialty: Real estate development, design-build, general contracting, architecture and engineering

Management: John Solberg, president; Tom Parsons, senior vice president and general manager

Founded: 1953 as Rauenhorst Construction

Local office: Bellevue

Current projects: 1521 Second Ave, Seattle; M Street, Seattle; 1200 Madison, Seattle; The Crossings, Federal Way; Harbor Square, Bainbridge Island

Image courtesy of Opus Northwest
Opus Northwest is developing the 7th & Madison building, a nine-story mid-rise with 195,000 square feet of Class A office space.

Tom Parsons, senior vice president and general manager of Opus Northwest, said the real estate market’s appetite has been tremendous the last two years, but rising construction costs are changing what projects are economically feasible.

“We have a lot of projects that were contemplated 18 to 24 months ago that the development community has been purs

uing entitlements for building, and now they’re finding the development they’re building isn’t economically feasible.”

Residential market squeezed

The rising costs have touched all sectors, but Parsons said residential has been squeezed on both sides because financing options that were available two to three years ago have declined.

Sales prices and construction costs are higher then original projections for Opus Northwest’s 1521 Second Avenue Tower, which Parsons said will be the first residential tower completed under the new city codes for increased density and height. But because the cost rise happened during the project’s feasibility stage, Parsons said they were more easily incorporated into the pricing. The inclusion has paid off, since 80 percent of the units have been pre-sold.

Permit-friendly municipalities

One factor that affects a building’s construction time line, and thus its cost, is the attitude and length of a municipality’s permitting process. Some are better then others, and tout their development-friendly attitude with advertising. Parsons said it works, attracting his company and others, with some such as “friendly Snohomish County,” doing a “fabulous” job being hospitable to all aspects of business.

But Parsons added that for every region, it is necessary to consider the whole picture. A business needs to be located near others, and that kind of community build-up takes time, he said.

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