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SEATTLE, April 10 – Carpenter’s Tower, LLC, the owner of the 25-story McGuire Apartments in the Belltown area of Seattle, today announced plans to vacate the building at Second Avenue and Wall Street over the next several months due to extensive construction defects which are financially impractical to repair.

“While there are no imminent tenant safety issues, the experts involved in the investigation and repair of the building have indicated that there will be structural issues that could present safety issues by 2011 and beyond,” said Brian Urback, with Kennedy Associates, the real estate advisor for Carpenter’s Tower.  ”The McGuire is not in imminent danger of a structural failure and the experts have advised that the building be vacated by the end of 2010.  Under the circumstances, we are taking steps to vacate the building over the next several months and to help our tenants relocate.   Since the necessary repairs are impractical, the decision of the owner is to dismantle the building.”

The building owner has informed officials at the Seattle Department of Planning and Development (DPD) of the extensive construction defects, which principally involve corrosion of post-tensioned cables and concrete material and reinforcement placement deficiencies.  The post-tensioned cables are corroding because the ends of the cables were not properly protected with corrosion preventative paint, and the grout used to seal the cable ends and anchors was not the specified non-shrink grout and was defectively installed.  As a result, water leaked into these areas and caused the cable ends to rust, and then corrode.  In addition, reinforcement placement in the building’s exterior frame is defective, resulting in cracking and spalling of concrete, as well as structural impairment.

DPD has written a letter indicating it will issue an order later this year finding the building no longer safe to occupy and requiring the owner to “correct the unsafe conditions or vacate the building by December 31, 2010, or earlier.”  The letter also indicates that the city is “requiring that the owner monitor the building condition and periodically submit inspection reports to DPD.”

“We are providing an incentive package to help our tenants relocate much faster than the end of the year,” Urback said.  ”We recognize that this is a major inconvenience so we are trying to make it as easy as possible under difficult circumstances.  We are providing what we think are generous financial incentives if they move quickly.  We are paying moving expenses.  And we are having our building staff help them find new apartments.”

Carpenter’s Tower is owned by Carpenters Union, Local 131, and by MEPT, the Multi-Employer Property Trust.  Construction of the McGuire was completed in 2001.  There are 272 residential apartments and four street-level retail spaces in the building.  Carpenter’s Tower has filed suit against the general contractor responsible for the construction of the building and against the building’s architects.

SOURCE Kennedy Associates Real Estate Counsel, LP

We have all followed The Alex for over 2 1/2 years now and it looks like there is a light at the end of the tunnel- VOLTA. 

Situated on the corner of 1st and Bell (on one of my favorite stretches in Belltown)…this 9-story, 34 unit building is nearing completion with the Sales Gallery opening this coming spring.  According to the website, there are 20 different floorplans (live/work, 1bd & 2bd) to choose from and square footages range from 524SF to 1250SF.  Surprisingly, the 1 bedroom located on the NW corner looks to be the largest in the building- would be my first choice in terms of view, storage, SF and flow!  Pricing is rumored to start at $299, 950! More details to follow… 

I am glad they finally replaced the old and outdated sign with the new and improved…much better!

WOW- what a weekend for our condo market!  I just received this recap from Realogics….

It was certainly an exciting weekend in our marketplace despite competition from sunny skies and a Seahawks game. Of course, the much-anticipated auctions by Schnitzer West for Gallery and Brix occurred.  And we kicked off some initial promotions for Condo Bulk Buy by offering advance previews for two participating projects – The Decatur and 1111 East Pike.  Last (but certainly not least), we hosted a unique open house and art walk at Fifteen Twenty-One Second Avenue, which followed a series of events at that property.

Here’s our take on all this activity:

SCHNTIZER WEST AUCTIONS
o       Impressive sell-through of the strategic unit release followed (no doubt) by additional sales at similar (or higher) pricing over the coming weeks

o       In aggregate, units sold at 30-32% below previous list prices (higher than most anticipated)

o       Accelerated Marketing did a great job facilitating the auction with successful bids averaging 150% of the minimum bid amount (one of their better results)

o       Tom Vetter (principal of Accelerated Marketing) was gracious to host several of our Realogics executives for this demonstration

o       Several hundred participants attended today and more than a thousand prospective buyers visited their two sites over the last month – so it would appear that demand is constant

o       Buyers still feel like “first responders” in this marketplace and want a deal to pull the trigger (they got one)

o       I’ll be interested to follow the unsuccessful bidders in the coming weeks – the supply has just become much more finite and the incentives for buyers are present today but not indefinite (no new inventory has entered the market for two years and won’t for a while)

CONDO BULK BUY
o       Thinks are heating up – our alternative to auctioning inventory is making sense to prospective buyers and we’re garnering very positive feedback so far

o       Our sellers acknowledge their likely auction results and are willing to provide that discount now in bulk (provided they are successful in selling the majority of their release)

o       Buyers love the notion of “The More We Sell, The More You Save” – prices start out great and get even better

o       With Nov. 30 quickly approaching (and the discontinuation of first-time homebuyer tax credits), buyers want to be confident in their home and their value – there’s a risk at auctions (ask those that missed out tonight – now what?)

o       We’ve had more than 100 prospective buyers register in the last week alone

THE DECATUR
o       About 60 buyer groups registered this weekend in response to impromptu ads and recent media attention

o       Agents say “multiple” buyers will make a reservation this week – just as soon as price ranges and agreements are firmed up by the seller

o       Buyers noted that average discount offered at recent Seattle-area auctions range from 25-30% off previous list prices – the bulk sales approach offers up to 35% off

o       Unit prices on average are still more than $100K less than Brix’s reset auction prices and price per foot basis is 20% lower using the bulk approach

o       Watch for website updates this week

1111 EAST PIKE
o       Several dozen “preview” tours this weekend – full marketing push coming soon with building completion pending

o       Upon touring, buyers to recognize the significance of the “original” Tom Kundig design concept versus more production-oriented development (it’s all about the design and details)

o       First release bulk pricing averages about $430 per sq. ft., which is less than a 10% premium to the average Brix auction price (not a bad investment considering the preferred Pike St. location and “collectable” design)

o       Watch for website updates this week

FIFTEEN TWENTY-ONE SECOND AVENUE
o       Several hundred folks came through the model homes and the Canlis Glass penthouse art installation over this past week and weekend

o       More than a dozen were identified as “A” or “B” prospects (signaling their intent to buy soon)

o       At least one qualified offer was presented this weekend (more sales anticipated this week)

o       Buyers are starting to feel more urgency where there is limited inventory for preferred price points or floor plans

o       The opportunity to “sleep on it” was provided to a number of prospective buyers, whereas a completely furnished, two bedroom guest suite is offered for overnight stays to experience the unique lifestyle at the property

There’s certainly some excitement in the air.  The next few weeks will likely be the harbinger of the fall condo sales season. I personally feel that many buyers will jump off the fence and pick a seat over the next 60 days.  Most projects that are in need of a reset (and not all are), will be reset.  And with the appropriate incentives in place, preferred selection, low interest rates and perishable tax credits may have more to do with “timing the market” than waiting around for lower prices still.

- Dean Jones, President / C.E.O.
Realogics

To add to the excitement- I visited the Escala sales center this weekend and they had 3 sales just in the last week!  Final walk-throughs will be scheduled for the end of October and closings should start in November…the building is looking beautiful!  More updates to come…

HSC/Riverstone Residential Group just posted a couple ads on SeattleRentals.com for the NEW Moda Apartments in Belltown (2312 3rd Avenue):

- Studios: $1225 to $1695 per month, 251 to 474 SF
- 1 bedrooms: $1250 to $1825 per month, 467 to 546 SF
- 2 bedrooms: $1925 to $2175 per month, 530 to 631 SF

For those of you not familiar with the project, Moda was originally built as condominiums. When the sales office opened two years ago (this week), buyers stood in line to snag one of the 251 efficiency units, BUT despite the “sold-out” building status, last month the developer G. David Hoy (HMI Real Estate Inc. ) announced that market conditions and financing hurdles would prevent a sizable amount of buyers from the possibility of closing on their homes. Now, we have Moda Apartments…completion is set for October!