Many development projects in the neighborhood are stalled, in foreclosure or almost empty. Green Lake provides a case study of just how dramatically the local commercial real-estate market has reversed.
When the Green Lake Albertsons property came on the market in early 2006, Trammell Crow Residential quickly snapped it up.
The Seattle market was hot. Green Lake was hotter. “This one was pretty easy,” said Sean Hyatt, managing director in the developer’s Seattle office.
Now, three years later, Trammell Crow has finished building Circa, a four-story, full-block project on the site of the former grocery.
And the market has developed a serious chill.
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About 40 percent of Circa’s 199 apartments have been rented since leasing began in January, Hyatt said. About one-third of the ground-floor retail space is spoken for.
All things considered, he said, that’s not so bad.
Other Green Lake projects conceived around the same time as Circa are in much worse shape. At least two have defaulted on loans, according to public records, and banks have moved to take the properties back.
Green Lake provides a case study of just how dramatically the local commercial real-estate market has reversed, and how the downturn is touching even the most popular neighborhoods.
In the boom years, Green Lake and the park surrounding it were magnets for developer dollars. Applications for new apartment, condo and retail projects seemed as ubiquitous as jogging moms pushing strollers on the 2.8-mile path around the lake.
Then came the downturn. Some projects disappeared before they even got permits.
Others that did break ground stalled — most visibly Green Lake’s most ambitious development, a massive complex of up to 500 apartments and 120,000 square feet of retail on the old Vitamilk Dairy site at Woodlawn Avenue Northeast and Northeast 71st Street.
Developer Lorig Associates stopped work on the first phase more than 18 months ago when the supermarket slated to be its anchor tenant backed out. Today the site is a blockwide crater.
Tough times citywide
What’s happening at Green Lake almost certainly is occurring in other Seattle neighborhoods where land values appreciated significantly before the crash, said land-use economist Matthew Gardner.
“This is by no means unique to Green Lake,” he said.
Michael Cornell, a real-estate agent and president of the Green Lake Community Council, said he isn’t surprised by what’s happening in his neighborhood. “It’s going to be a long time before these developers have the resources to charge ahead like they were a couple years ago,” he said.
Dallas-based Trammell Crow Residential still has deep pockets; it’s one of the largest multifamily developers in the country. Hyatt said leasing at Circa will pick up this summer when good weather brings people back to Green Lake.
He predicts the complex, where Northeast Ravenna Boulevard meets the park, will be 95 percent occupied by fall. It’s already attracting many young professionals, he said, often newcomers to Seattle.
But the recession has forced the company to lower rent expectations, Hyatt said. And he admitted he’d be happier if the project were leasing up faster.
The only significant new development in Green Lake that could break ground this year is Village Cove, a four-story senior apartment complex proposed by The Hearthstone, a long-established retirement community.
The site, a block from The Hearthstone’s 10-story lakefront tower, was cleared this spring. But marketing director Paulette Gregory said construction won’t start until at least half the 28 units are presold so construction financing can be secured.
A block away, the owner of another Green Lake landmark, Spud Fish and Chips, filed paperwork in 2007 to build a four-story, 12-unit apartment building with ground-floor retail on the site of the venerable drive-in.
The plan was to move the restaurant to the Circa building next door, said Pam Cordova, Spud’s owner — but then the economy tanked. The redevelopment plan is “on hold or dead,” she said.
At Florera, a condominium across Northeast Ravenna Boulevard from Circa that was completed last year, only about 15 of the 59 units have sold. Developer Pryde Johnson recently put the remainder up for lease, with options to buy.
“We’re just buying time for the market to recover,” principal Curt Pryde said. “Nothing new’s being built. What’s there now is just going to get more valuable.”
A second phase has permits but is on hold.
At Ashworth Cottages, another recently completed Pryde Johnson project at the north end of the lake, two of 20 homes have closed. Pryde said he sold another last week and is considering three more offers.
But Bank of America moved earlier this year to foreclose on the 18 unsold units, according to county records. The trustee’s sale has been postponed twice, and Pryde said last week he has worked things out with the lender.
But the property still is scheduled to be sold at auction Friday.
Nearby, at North 80th Street and Green Lake Drive North, work should be finished this summer on Green Lake Point, a five-story, 21-unit apartment building.
Developer Marcie Taylor, who once ran a hair salon on the site, said she expects that, like Circa, the economy will force her to settle for lower rents than anticipated.
And she said she’s still looking for a tenant for the ground-floor retail space; a tentative deal fell through when the business couldn’t get financing.
On the lake’s west side, developer Jesse Molnick said he has abandoned plans for a four-story residential and retail project at Aurora Avenue North and West Green Lake Drive North, partly because he doubted he could get financing.
Just across Aurora, another stalled project looms where the landmark Twin Teepees restaurant once stood. Work halted months ago on the Tyee at Green Lake, a 24-unit condo complex.
Developer Bristol Homes has defaulted on its loan and failed to pay contractors, according to court papers. A judge appointed a third-party receiver to manage the property in March.
Trammell Crow’s Hyatt said there’s a silver lining in all this for Circa: less competition.
Rents at the complex range from $1,100 for studios to more than $3,000 for two-bedroom, 1,200-square-foot corner apartments — Hyatt calls them “rock star units” — that overlook Spud, the park and the lake.
There’s a big rooftop deck, plus two courtyards. The public eventually will be permitted to walk through one courtyard to reach the lake.
Hyatt said he’s confident Circa will succeed, in part because of where it is. “It’s one of the few truly iconic locations,” he said.
Green Lake will bounce back, Cornell agreed. Single-family home sales already are picking up, he said; it’s the larger projects that are having trouble.
“It’s not the first time there’s been an overheated market,” he said, “and it’s not the first time there’s been a slowdown.”
The downturn gives the neighborhood and the city a chance to address problems that surfaced during the boom years, he said, especially parking and traffic congestion.
Meanwhile, he added, with the Albertsons gone and Lorig’s Vitamilk project on hold, Green Lake could use a new supermarket.
Eric Pryne: 206-464-2231 or email@example.com