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Multifamily Mania

Multifamily Mania
Overbuilt, underbuilt, should we build, should we build more? (Who stole the cookies from the cookie jar?) The opinions of our panelists at Bisnow's 2nd Annual Multifamily Summit at the Four Seasons varied, but everyone agreed on one thing: It's a great time to have apartment projects in and around Seattle.
Multifamily Mania
The crowd of nearly 300 got up in the middle of the night (aka 6am) to watch the sun rise over Puget Sound from the Four Seasons and to have their pertinent questions answered.
Security Properties's John Orehek and Nicholas Bley of Chase at the Four Seasons Seattle.
Q: Are you concerned about Seattle being overbuilt?
-Not really. Security Properties CEO John Orehek pooh-poohs the idea that oversupply is a horrible thing: "If there's oversupply, the renters win, and that's not necessarily bad so long as the lenders get paid off," he said. What does John look for in a site? Jobs, food,recreation, and services. (Self-actualization follows soon after.) Areas where gentrification is coming—but hasn't necessarily arrived— will get a much closer look. (Hello, Carnation!)
Goodman Real Estate CEO George Petrie at the Four Seaosns Seattle.
Q: Who's got the most potentially stimulating new project?
Goodman Real Estate CEO George Petrie thinks the Eastside—Juanita, Kirkland and Bellevue— are areas to watch. Goodman, a fairly new investor in all things Seattle, just bought a piece of land in east Bellevue ("a leap of faith," George called it), which he expects will either be "a nursery... or a gun range." (Talk about keeping options open.) When George said "nursery," you could just see the great minds of Seattle CRE smirking a bit as they thought about marijuana, which becomes legal in very small quantities in two days. George: "Hey, it's retail!"
Holland Development's Tom Parsons at the Four Seasons Seattle.
Q: Who's feeling optimistic?
- That would be Holland Development's Tom Parsons, who's taking his cues from Gen Y: one of his most memorable meetings of the past several days involved nine people discussing what goes into the perfect bike room. (We bet playing classical music helps the bikes grow and plumps up their tires.) Even if the nature of being a developer is to be constantly adapting to shifting markets, Tom sees the market as a healthy one and multifamily prospects as good. "It won't all get built, and capital is tapping the brake already. Things are not as gloom and doom as people are projecting."
Bellevue boys Bryan Meyer of Essex Property Trust and Kevin Wallace of Wallace Properties at the Four Seasons Seattle.
Q: What keeps you up at night?
- Wallace Properties's Kevin Wallace says his 6-year-old son, who came into his bedroom very early Thursday morning and announced he'd had a nightmare. "I realized that I should teach him to be a developer, so he'd have his nightmares during the day." We can't quite imagine that there's anything troubling Kevin (whose Citizen of the Pike/Pine has been an unmitigated hit and whose 265-unit Northgate project makes Wallace the only player in that submarket right now) unless it's deciding where the next project will be. Wallace is shopping around for a transit-oriented project to get started on within the next couple of years, Kevin says.
Holland Development's Tom Parsons and JLL's David Young at the Four Seasons Seattle.
Q: What's the most important driver of the multifamily market?
-According to moderator extraordinaire David Young of JLL, it's all about "jobs, jobs, jobs." Yet we're still considered a geographically constrained market, he adds. What exactly are those constraints? As David puts it: "Water, mountains, NIMBYs." (It's true—nobody we know is looking to take down a mountain and put up a shopping center... yet.)