Seattle Commercial Real Estate News of the Day

Tuesday, February 14, 2012

Seattle Times Daily Journal of Commerce Headline
Boeing locks in biggest plane order with Lion Air

102 apartments for site at Fifth & John

Retail sales rebound as consumers step up spending Two local lawyers plan to start building a seven-story 102-unit apartment project near Seattle Center in the first or second quarter of 2013.

L&P Partners — headed by Scott F. Lundberg and Brian Peschel — will construct the complex at 500 John St.

NK Architects is designing the building, which will also have four live-work units and about 85 parking stalls.

The units will be studios, open one-bedrooms, one-bedrooms and two-bedrooms. The complex will have a roof deck, fitness center, lounge with television and kitchen, dog wash, and storage for bikes and other items.

The lawyers are partners at Graham Lundberg Peschel, and own the building where the firm is housed. That building will be demolished for the apartments, as will one occupied by The Funhouse, which bills itself as “a dive bar by day and live music venue at night.”

Peschel said he and Lundberg have The Funhouse building under contract.

Peschel said the U.S. Department of Housing and Urban Development will guarantee the financing for the apartment project through its 221(d)(4) program, which Peschel said promotes apartment development in high demand areas. He and Lundberg will also put in money.

The law firm needs to move to a larger space, and an analysis showed apartments are the best use for the property, Peschel said.

He said the site is in a prime location near downtown, Elliott Bay, the Bill & Melinda Gates Foundation campus and South Lake Union, home to Amazon.com’s headquarters.

“You can’t get much better,” he said.

Developers have been racing to get apartments built in downtown Seattle following a period during the recession when financing was difficult or impossible to find. Many are hoping to tap into a wave of young professionals who like in-city living, and either want or need to rent.

Apartment vacancy is 5.34 percent in the Queen Anne submarket, which includes the Seattle Center area, said Tom Cain of the research firm Apartment Insights. That is up 168 basis points over the third quarter of 2011.

Rents have been rising in downtown Seattle, but Cain said with lots of new apartments getting built and home ownership becoming more affordable, it will be more difficult to raise rents going forward.

Lundberg and Peschel own apartments and office buildings in Seattle, and have constructed several office buildings.

They and another partner recently developed Legacy Apartments at Dove Mountain, a 168-unit complex just north of Tucson, Ariz., that is 60 percent leased, Peschel said.

Lundberg and Peschel founded Lundberg & Peschel in 1986. In 1998 the firm merged with the Law Offices of John Graham to form Graham Lundberg Peschel, which does plaintiff’s personal injury work.

Lundberg and Peschel bought the law firm’s building in 1994 for $550,000 from West One Bank. It has been revamped several times since them. They have an agent looking for new space for the firm.

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About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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