The real estate crash of the late 2000s has been very difficult for both residential and commercial real estate markets. In fact, U.S. Bankruptcy Court statistics show that over 1,100 businesses filed for bankruptcy from Sept. 2010 to Sept. 2011, leaving many commercial buildings without enough tenants, which drove down real estate values.
However, MyNorthwest reports that after years of commercial construction dormancy, the Seattle area is poised to see several significant projects at high-profile sites. For example, a three acre hole in the Greenlake area will soon be filled by a 290-unit apartment building, which will sit atop retail chains and a new marketplace.
Additionally, in December 2011, the former Ballard Denny’s began its transformation into a brand new 288-unit apartment complex, essentially removing a symbol of the market crash that has plagued Seattle for nearly five years.
What Took So Long?
Many people, companies and other entities have interests in large construction projects. These include the city of Seattle, contractors, sub-contractors, neighboring businesses, suppliers, engineers and many more. As a result, these projects must consider many cross-functional relationships and detail each party’s risks, liabilities and expenses. Mistakes can easily be made with so much information to consider, organize and prioritize.
For example, some of the most common problems that cause construction or development delays include:
- Unexpected price escalations
- Coordination failure among contractors or sub-contractors
- Inexperienced parties
- Approval delays
- Unexpected design variations
- Unclear roles or responsibilities for each party
Luckily, after a lengthy delay, Seattle’s once-thriving commercial sector looks to become a new “hot spot” for apartment seekers and businesses in the next few years.
Many challenges can arise during the course of a developmentproject. Anyone looking to acquire, develop, finance or sell commercial property should speak with an experienced real estate attorney. Your lawyer can help avoid any problems over the course of a deal as well as represent your interests in litigation should a dispute arise.