Specialty: Residential and mixed-use development, property management
Developers can start breathing easy again ... in 2012. That’s how long it could be before the market is ready to accept more construction, according to Lorig Associates partner Bruce Lorig.
“It’s not possible to get new projects started, and it probably won’t be for three years,” he said. The firm has projects on the drawing board “we won’t expect to start for a considerable time.”
Lorig, with Stellar Holdings, completed development of Thornton Place this year. The 6-acre project, built in a former Northgate parking lot, has 278 apartments, 109 condominiums, 50,000 square feet of retail and a 14-screen cineplex.
The condos have been slow to sell — the project made news last spring when it offered a “layoff guarantee” to entice skittish buyers — but the apartments are 60 percent leased, and a quarter of the retail space has been filled. But with holiday season in full swing, Lorig expects condo sales to continue to their torpid pace.
The firm’s property management business oversees around 2,500 apartments and 200,000 square feet of retail. Partner Alison Lorig said leasing activity has been going fairly well, particularly over the past six months with the help of concessions. The apartment vacancy rate is 7 percent, “higher than normal, but not outrageous,” she said.
Ready to recover
Bruce Lorig predicted the local apartment market is in the best position to recover soon, perhaps in 18 months. The office market, he said, will be in bad shape for another four to five years, and retail may never fully come back.
“Retail will be a niche market,” he said, citing the national 10 percent vacancy rate.
Seattle zoning requires more retail space that it really needs, he said, though there are still some places where it’s appropriate and should be required. One problem is that city planners “can’t move fast enough to know where (retail) is appropriate.”
Working for others
While Lorig Associates is putting its own projects on hold for awhile, it continues to develop projects for others.
The firm expects to have its hands full for the next two to three years with projects such as student and workforce housing, and government and nonprofit projects.
“We think we have some skills that are very valuable,” Lorig said, “and we’re renting them out to other people.”
The recession will leave fewer developers standing, he said, particularly those who were doing the work as a sideline “because it was a higher return business” in recent years.
Lorig Associates is roughly the same size it was a year ago, but the development staff is down to 70 percent of its previous level, and the project management staff has grown.
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