Seattle Bubble

News & discussion about real estate & the housing bubble in the Seattle area.

Seattle Bubble - News & discussion about real estate & the housing bubble in the Seattle area.

Entries Tagged as 'WaMu'

Weekend Roundup: Empty Condos, Story Updates, & a Rosy Forecast

By The Tim on June 20th, 2009 at 11:57 AM · 35 Comments

Got a few interesting stories for you today.

First up, from the Puget Sound Business Journal: Seattle, Bellevue luxury condominium towers are slow to fill up

Three-quarters of the new condos at five major buildings in Seattle and Bellevue are unsold, leaving developers in a high-stakes battle to unload millions of dollars worth of homes.

The units — at Fifteen Twenty-One, the Four Seasons Private Residences, Olive 8, Bellevue Towers and Washington Square Towers — represent the majority of large condos that have opened here in the past 18 months. In many cases, dozens of pre-sale agreements booked by developers have failed to come to fruition.

County records show just 317 units have recorded closed sales out of the 1,321 offered at these five projects, which is fewer than some of the developers had expected to sell at this point.

The monthly NWMLS stats really don’t give us a complete picture of just how over-supplied the local condo market truly is. I’m still working on compiling the Condo Sales Status Project. There’s a lot of info out there.

You may recall the free advertising given by the Seattle Times to the Thorton Creek condos back in March for their “if you lose your job we’ll pay your mortgage” promotion. Another story about the development in yesterday’s paper contained an interesting bit of information:

Seattle Public Utilities recently completed the stream-restoration channel as part of a new development that brings more than 100 condos, 278 apartments, senior housing, a 14-screen movie theater and more retail space to the North Seattle neighborhood.

Lorig and Stellar Holdings say they’ve rented about 50 of the apartments, which exceeds their goal to date. The market has been slow for the condos, however, with only one unit sold, said Stephen Holt, partner at Lorig in charge of the project.

No word on whether that one sold unit was a result of their big promotional push in March. A representative for the developer has offered to talk with me, but unfortunately I have yet to find room in my schedule.

Here’s another update. Recall the October ‘08 post Former WaMu Pres. Tries to Flip Mansion. As it turns out, he was finally successful: Ex-WaMu exec unloads Seattle mansion

Looks like former Washington Mutual President Steve Rotella has been given a lesson in lost value, sort of like the shareholders who watched their stock tank in the months before the bank collapsed last year.

Rotella and his wife, Esther, just sold their Capitol Hill mansion for $4.7 million, according to King County property records, about $1.5 million less than they listed it for after WaMu failed nine months ago.

We’ll end today’s post on an upbeat note from BusinessWeek.

Two big factors will help bolster Seattle housing prices in the next few years: stringent building restrictions and basic geography.

City officials kept a tight rein on development during the boom. … An isthmus, Seattle is hugged by the Puget Sound on the west and Lake Washington on the east.

With such constraints, Seattle doesn’t have a significant supply of homes on the market.
…
Some areas of Seattle are on the mend already, with houses even sparking bidding wars.
…
Building restrictions—and the city’s unique geography—should help lift prices.

It would appear that the writers of BusinessWeek seem to think that the city of Seattle proper is completely insulated from real estate trends in Snohomish County, the Eastside, or south of Lake Washington. Interesting theory. Good luck with that.

(Jeanne Lang Jones & Kirsten Grind, Puget Sound Business Journal, 06.19.2009)
(Michelle Ma, Seattle Times, 06.19.2009)
(Kirsten Grind, Puget Sound Business Journal, 06.18.2009)
(BusinessWeek, 06.18.2009)

→ 35 CommentsCategories: News
Tags: , , , , , , ,

News Roundup: Local Banks on the Brink

By The Tim on March 30th, 2009 at 1:00 PM · 6 Comments

The last few days have seen a handful of articles in the local press on the subject of the strength (or lack thereof, as it turns out) of local banks. Here’s a brief summary.

First-up is a relatively in-depth look at the status of dozens of banks based in Washington State: Washington’s banks under stress

…several of Washington’s community banks also are clearly straining under the weight of the crisis, a Seattle Times analysis shows.

At least a dozen of the 52 Washington-based banks examined are carrying heavy loads of past-due loans, defaults and foreclosed properties relative to their financial resources. Many of these banks have set aside relatively little cash to cover problem loans, the analysis shows.

And even the relatively healthy banks are under more pressure than they were a year ago.
…
…at most community banks, residential mortgages were a relatively small part of their business. Instead, their troubles are tied directly to their heavy dependence on real-estate loans — mainly loans to local builders and developers.

“Many community banks found that (construction and development loans) was an area in which they could compete effectively against the big banks,” Frontier’s Fahey said.

At Frontier Bank, for example, construction and development loans made up 44.5 percent of all assets at year’s end. City Bank had 53.3 percent of its assets in such loans, and at Seattle Bank (until recently Seattle Savings Bank), they constituted a full 54.2 percent of total assets.

Such loans looked safe and generated big profits during the housing boom. But since the housing market began to crater in late 2007, defaults on such loans have soared industrywide.

We know that it will likely take between two and eight years to work through King County’s housing oversupply. In the mean time, small builders—and by extension the local banks that loaned them money—are going to be experiencing some tough times.

Next up, the Olympian brings news of some even more serious news for Lacey-based Venture Bank: Venture Bank faces financial deadline

Federal regulators have ordered Venture Bank to raise more capital or find a buyer by next month because of concerns about its financial health.

In a letter dated Feb. 13 but disclosed on the Federal Deposit Insurance Corporation’s Web site Friday, the FDIC notified the bank that it has 60 days to raise more money, find a buyer or find a merger partner. The 60-day period ends April 14.

Meanwhile, Federal Home Loan Bank of Seattle reported a loss of $241 million in the fourth quarter 2008: Federal Home Loan Bank of Seattle reports losses

And finally, the Seattle Times front page story today focuses in on the impact of the job losses at WaMu’s former downtown headquarters: Layoff aftershocks hit WaMu neighborhood

So is there any good economic news out there for Seattle and Washington State? Well, not really on the banking front, but Amazon is still pretty profitable, and hey, at least we’re not Cleveland, right?

(Drew DeSilver, Seattle Times, 03.29.2009)
(Rolf Boone, The Olympian, 03.29.2009)
(Seattle Times, 03.30.2009)
(Marc Ramirez, Seattle Times, 03.30.2009)

→ 6 CommentsCategories: News
Tags: , , , , , , , , , , , ,

JPMorgan to Drop WaMu Leases Downtown

By The Tim on December 24th, 2008 at 10:29 AM · 28 Comments

Here’s another WaMu update on a subject that will likely have a large impact on downtown’s commercial real estate scene:

Seattle Times: JPMorgan dumping WaMu’s leased space in Seattle
Seattle P-I: JPMorgan dropping six WaMu leases in Seattle

From the P-I story:

New York banking giant JPMorgan Chase & Co., which in September bought the branches, deposits and loans of Washington Mutual Inc. of Seattle for $1.9 billion, plans to drop the leases in six downtown office buildings now housing WaMu employees, a WaMu spokeswoman said.

WaMu currently leases about 880,000 square feet in downtown Seattle, said Patrick Mullen, a research analyst with Grubb & Ellis Co., Seattle.

“Assuming Chase lets go of most of the workers in those leased offices, and then lets go of the offices, that event alone could drive up vacancies 2 to 3 percentage points in the central business district,” Mullen said. “It would depress rent rates even more than they are now.”

Mullen said the massive withdrawal could also undercut the roughly 2.5 million square feet of office space due for completion in downtown Seattle next year.

Also, from the Times story:

It also decided WaMu’s Cedarbrook corporate-training center in SeaTac is “not a core asset for us, and we are looking at options for it,” said JPMorgan spokesman Thomas Kelly.

Now is not a particularly great time to be in the commercial real estate business in downtown Seattle.

(Melissa Allison and Eric Pryne, Seattle Times, 12.24.2008)
(Dan Richman, Seattle P-I, 12.23.2008)

→ 28 CommentsCategories: News
Tags: , , , , , , , ,

Official WaMu Layoff Count Announced

By The Tim on December 1st, 2008 at 2:30 PM · 25 Comments

WaMu Tower
Photo by The Tim

The official layoff count for WaMu was made public today. According to various news sources, JPMorgan Chase will be cutting 3,400 jobs in Seattle.

JPMorgan Chase is laying off 3,400 Washington Mutual employees in Seattle, according to spokesman Tom Kelly. That’s more than 80 percent of the 4,300 people it employs in the city.

Most branch workers will keep their jobs, however.

WaMu’s former headquarters city is taking the brunt of the 9,200 WaMu layoffs that JPMorgan is making nationwide.

This is even more than the estimates we heard just a few weeks ago, when anonymous WaMu executives were cited in a Times report that said “as many as 3,000 of WaMu’s 4,200 workers in Seattle could lose their jobs.”

Fortunately it sounds like those that are losing their jobs are at least being given pretty nice severance packages, and many will have lots of time to find new jobs. It still hurts to lose a job though, and I sincerely hope that those affected by the massive bank failure are able to keep on their feet through these difficult economic times.

(Melissa Allison, Seattle Times, 12.01.2008)

→ 25 CommentsCategories: News
Tags: , , , ,

Seattle Times: JPM to Cut ~70% of WaMu HQ Employees

By The Tim on November 19th, 2008 at 10:20 AM · 79 Comments

According to today’s Seattle Times, JPMorgan Chase plans to cut around 70% of WaMu’s Seattle-area employees.

JPMorgan is handing out layoff notices now and is expected to finish making decisions about all of WaMu’s 43,200 employees nationwide by Dec. 1.

As many as 3,000 of WaMu’s 4,200 workers in Seattle could lose their jobs, according to current and recently departed WaMu executives who spoke on condition of anonymity.

“It’s pretty dire for Seattle,” said one former high-ranking executive.

The layoffs will leave gaping holes in downtown Seattle’s commercial real-estate market, where WaMu occupies more office space than any other company.

With no other major banks headquartered here in Seattle, I wonder where all these newly jobless banking professionals will be able to find work.

I’d like to extend my condolences to those that are affected by these cuts, which are likely to include some of my friends. Sure, we were right about the housing bubble, but nobody likes to see people lose their jobs.

Best of luck to the soon to be former WaMulians.

(Melissa Allison & Eric Pryne, Seattle Times, 11.19.2008)

→ 79 CommentsCategories: News
Tags: , , , ,

Former WaMu Pres. Tries to Flip Mansion

By The Tim on October 20th, 2008 at 9:12 AM · 25 Comments

Okay, I had this story emailed or IM’d to me by about half a dozen people over the weekend, so I guess I’d better at least mention it :^)

Former WaMu President's MansionFormer WaMu president lists home for nearly 2x 2005 purchase price:

Stephen Rotella, who was president and chief operating officer of Washington Mutual when it failed last month after being battered by mortgage losses, is wading into the housing market as a seller. He’s hoping to sell his home on Capitol Hill for $6.25 million.

County records show he and his wife, Esther, paid $3.78 million for it in June 2005, a few months after Rotella arrived in Seattle.

Here are the county records for the property in question, and here’s the listing on Redfin, for those of you that want to add it to your favorites.

I suppose without a major bank president job, it might be hard to keep paying the mortgage on a place like that. I think he might be just a little optimistic on the price, though.

Update: Dan Savage of The Stranger rode by and shot a pic of the front of the house.

→ 25 CommentsCategories: News
Tags: ,