Four Seasons: Back on Course

Thanks to successful restructuring  with a prominent Seattle investor group led by Jolene and Bruce McCaw, The Four Seasons Hotel and Private Residences Seattle is back on firm, long-term financial footing.

“The cloud over this project has lifted. Working closely together, our partners have created a great global solution to Four Seasons Seattle’s financial challenges,” Bruce McCaw said. “This landmark development is solidly back on track, giving our guests, residents, prospective residents, the local real estate market and Seattle community confidence that Four Seasons Seattle is positioned as the preeminent luxury address in downtown Seattle.”

Built during the height of downtown’s recent construction boom, the $180+ million project opened in the fall of 2008, just as Seattle’s real estate market started to visibly crumble. The project went into default a year later in December 2009, unable to meet the terms of its previous loans. The project faced possible foreclosure or bankruptcy, an untenable prospect to the investors, which include a number of prominent Seattle families and residents at Four Seasons Private Residences Seattle.

“To protect and preserve this true Seattle icon, our investor group remained firmly supportive throughout this lengthy process, and we all worked very hard to reach a great solution for the Four Seasons Seattle investors, homeowners, contractors and lender,” McCaw said.

Under the restructuring announced on April 26th, affiliates of the Seattle Hotel Group LLC, owner of Four Seasons Hotel and Private Residences Seattle, invested additional funds and negotiated new terms with its construction lender, Washington Real Estate Holdings, LLC, which has agreed to extend the senior debt on terms and rate more closely resembling conventional first mortgage debt.

Craig Wrench, president and CEO of Washington Real Estate Holdings, said, “As a local company, we wanted to ensure the long-term success of this great property, and we’re proud to be a partner in the solution. This puts an end to the uncertainty that’s been swirling around this project.”

Washington Real Estate Holdings, headquartered in Seattle, invests in real estate assets throughout the western United States.

The investor team also settled a lawsuit brought by building contractor Lease Crutcher Lewis and liens against the property by Lease Crutcher Lewis and its subcontractors. Terms of the settlement were not disclosed.

Bill Lewis, president and CEO of Lease Crutcher Lewis and an original and continuing investor in Four Seasons Seattle, said, “Everyone gave up something, which was challenging, but ultimately this is a reasonable outcome for all parties. This is a great project that opened at a challenging time in the market. This restructuring solution is good for the project and good for Seattle’s real estate market.”

McCaw added, “I would like to thank both Washington Holdings and Lease Crutcher Lewis for their constructive efforts to resolve these complex issues. There were so many moving parts to this deal; this is a remarkable outcome.”

 Other details of the restructuring:

• The McCaws will lead a new ownership management board that will control the development. Original managers John Oppenheimer, Tom Alberg and Paul Schell support this management transition plan and remain investors. In addition, Alberg will participate in the new management board.
• Substantial financial reserves are in place to meet loan payments, homeowner association dues, capital improvements, etc.
• The McCaws’ team, led by David Brady, worked with restructuring specialists Ragan Powers at Davis Wright Tremaine and Michael Newsome of Zachary Scott.

Widely embraced by international business and leisure travelers and the Seattle community, the Four Seasons Hotel Seattle has been exceeding expectations. Management of the hotel, under seasoned general manager Ben Trodd, remains unchanged in the financial restructuring.

“Four Seasons Hotel Seattle is performing exceptionally well, and we are delighted that we have been welcomed back to Seattle in such a warm and positive way by the local community. We will continue to provide our guests with the uncompromising commitment to faultless service and attention to detail for which Four Seasons is proudly known,” Trodd said.

The 147 guest rooms and 36 private residences at Four Seasons Hotel and Private Residences Seattle are ideally situated in the cultural and business heart of downtown, just steps from Pike Place Market, Seattle Art Museum and the city’s best shopping, dining and entertainment venues.

Four Seasons Hotel Seattle offers the consummate Seattle experience. The modern waterfront hotel has a full spectrum of amenities that incorporate the best elements of the Pacific Northwest, such as sweeping views of Elliott Bay, poolside lounge, spa treatments that feature indigenous ingredients and a signature restaurant, ART, which just announced an exciting new menu that continues to highlight fresh, local ingredients.

Residents of Four Seasons Private Residences Seattle have access to 24-hour dedicated residential concierge service, valet parking, 24-hour room service and the hotel’s full spectrum of amenities and services. The private residences range from 1,300 square feet to more than 7,500 square feet and from about $1.5 million to more than $10 million. To date, 25 of the 36 private residences have been sold, closed and occupied.

Realogics Sotheby’s International Realty is selling the remaining residences.  For more information or to schedule a private appointment, please call us at 206-910-5000, or send an email to urgent@stroupe.com

Open House: Montreux, Unit 608 – Sunday, April 17th

Montreux  ~ 425 Vine Street ~ Unit # 608

$199,000

MLS# 197175

Sunday, April 17th, 2011 ~ Open from 12:00 to 2:00 p.m.

Your Host is Julie Roh

206.354.1030  ~  julie@stroupe.com

A bright one bedroom, one bath corner unit with a lovely outlook. This was THE original model home for the building, and comes complete with two deeded parking spaces!  Well-designed kitchen with bistro bar, private deck, in-unit washer and dryer, plus storage.

This unique European-flavored building is on the more intimate side of condominium living.  Only seven stories high, the Montreux focuses on quality, not quantity.  Their list of amenities holds up against any high-rise building.  You  get a secured entry, on-site manager, gym, business center and a club room.  Use the gas BBQ on the rooftop deck while taking in amazingly airy cosmopolitan views.

The Montreux has a Walk Score of 97 out of 100, and is perfectly located near Seattle Center and the Space Needle, restaurants, public transit and the best of Belltown. McGraw Square Park and Westlake Center are minutes away as well.  Need a little savoir-flair in your life?  Come see us on Sunday!  If you can’t make it, don’t worry.  Just drop us a line at urgent@sroupe.com to set up a private showing.

Eleven Eleven East Pike Wins AIA Award

Seattle architect Tom Kundig, FAIA, of Olson Kundig Architects and lead designer of Eleven Eleven East Pike (a debut condo project for the firm),  is a winner in the Multifamily Living category of the American Institute of Architects’ 2011 National AIA Housing Awards, one of 18 honored nationwide.

Eleven Eleven East Pike is located in the Pike/Pine corridor also known as “Auto Row”.  The first car dealership opened there in 1905 and for a good number of years, this used to be the only area in Seattle where you could buy a car. A century later and Auto Row is now home to a number of art venues, restaurants and retail stores. Trader Joe’s, Capitol Hill Arts Center, and Seattle University are all nearby. 

Kundig drew from the area’s history and gave Eleven Eleven East Pike tall, wide windows, high ceilings and an extensive use of steel.  The exterior siding panels are selected, by each unit owner, from a selection of classic 1950’s car colors.  It’s designed to give current and future buyers a mix-a-match aesthetic.

Kundig took that concept a step further. Famous for combining architecture with invention in his designs, or “working art”.  Eleven Eleven East Pike’s units contain an exclusive “Puzzle Door” system.  With a track running along the ceiling and wheels along the bottom, you can move the door around and place it as a wall wherever you want one, giving you the freedom to customize the shape of your interior spaces.

Kundig also introduced his original “Urban RV” in this project.  Another piece you can move around, you can transform the Urban RV into a coffee table, a kitchen island, or even a desk.  The kitchen has stainless steel appliances, and a rooftop garden offers a peaceful place to enjoy the famous Seattle views.

The AIA Housing Awards was established to recognize the best in housing design, and ”to promote the importance of good housing as a necessity of life, a sanctuary for the human spirit, and a valuable national resource.”  Its jury was impressed by the exterior space flexibility, “which gives the project richness and a joyful appearance.”   Both high and low-density projects for public and private clients were considered which, along with architectural design features, also included how well the projects fit into the neighborhood, open and recreational space, transportation and quality of life. 

Eleven Eleven East Pike meets LEED requirements for Development Density, Site Selection, Alternative Transportation and Storm-water Management. There are five homes remaining, with sizes ranging between 623 to 754 square feet, and prices run between $229,950 and $314,950. An extra $15,000 buys you a parking space.  

For more information or to schedule a private showing, you can either call us at 206.910.5000, or send an email to urgent@stroupe.com

South Lake Union – Before, and Which After?

Last week we ran a story regarding the public meeting on March 28th which focused on the City of Seattle’s Draft Environmental Impact Statement for the South Lake Union Height Alternatives, outlining four Alternatives, or plans, for the future development of South Lake Union (planning for the next 25 years and beyond).  The Draft EIS was compiled by the City’s Department of Planning and Development.  We stayed for 35 minutes of the public commentary and during that time, most of the speakers advocated Alternative One, which offers the greatest height and density zoning.

You can hit this link, select the Draft EIS plan, then go to Section 3.10, Aesthethics, and see how all the Alternatives stack up visually. Draw your own conclusions as to what you think would be best for South Lake Union.  Our attachment here only focuses on the Alternative 1 scenario, but it presents some compelling visions as to the full potential of SLU.  slu alt 1 graphics print

How the Alternatives differ:

Alternative 1 – outlines the greatest potential for height and density increases for commercial and residential development

Alternative 2 – mid-point between Alternatives 1 and 3, it contains lesser height and density increases for commercial and residential development

Alternative 3 – provides the least potential for height and density increases, and only cover residential  development

Alternative 4—“no action”, retaining existing zoning, and no height increase incentives

Finally, two things that all the Alternatives will share: it was stated during the March 28th meeting that there will be no changes to current shoreline designations, and that views to designated South Lake Union viewpoints would not be obstructed.

If you would like to read more about any of these Alternatives, please go to the full Draft EIS on this link.  It’s 659 pages long, but the document is also broken out by sections.   The DOPD engaged a number of consultants to help prepare the Draft EIS, and the Alternatives renderings shown here and in the Draft EIS were done by NBBJ, which worked on aesthetics, light/glare, shadows and viewshed for this project.

Finally, if you have comments or opinions, good or bad, about which Alternative to select– or about anything else covered in the Draft EIS, send an email to jim.holmes@seattle.gov no later than Monday, April 11. After that, the DOPD will commence work on a Final EIS, which should be finished this summer.  We’ll let you know when that report is released.

Map: USGS, 1897– from the Draft EIS

Tax Time Tips

This year’s federal filing deadline has been moved to Monday, April 18th.  More about why later, let’s get to work on deductions!  We riffled through a few websites and came across a few items we hope you know about… or should be made aware of.

Refinancing points—  Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan.  

Old refinancing points–  Unamortized points can be deducted in the year of a new refinancing.  And, if you can refinance a 2010 loan in 2011, you can write off the remaining balance in 2012.

Homebuyer Tax Credit—If you received the $7,500 repayable credit in 2008, you’re now liable for repayment at $500 per year.  The $8,000 first-time homebuyer credits of 2009 need no repayment.

Property Tax Deduction—You were able to claim $1,000 on top of the standard deduction for 2009, but not in 2010.  Congress let it expire.

Energy Savings Home Improvement Credit— You may be eligible for a 30% credit (maximum $1,500) for skylights, outside doors, windows, pigmented roofs, furnaces, water heaters or central air installed in your primary residence.  

Health insurance premiums—Self-Employed:  Deduct the full amount of your self-employed  health insurance premiums to the extent of your net income if the expense is included in your adjusted gross income. You can also deduct health insurance premiums when you calculate your self-employment Social Security and Medicare taxes.  Premiums paid after March 30, 2010 for kids up to age 27 are deductible.  On the other end, self-employed seniors age 65 and up can deduct Medicare premiums.  Employer Paid:  All health insurance premiums, including some long-term-care (depends on your age), can be deductible.  Add these to your medical expenses, and if they exceed 7.5% of your adjusted gross income, ka-ching! 

Tax expenses – You can include tax-planning and investment expenses but the total needs to exceed 2% of adjusted gross income.  Includes tax preparation fees, plus tax-planning legal or accounting fees.  The tax part of estate planning is deductible, too.   

Investment expenses —  Annual broker fees, directly paid IRA fees, even your security deposit box.  You can also deduct investment-related subscriptions such as Barron’s, Forbes, etc., and get receipts for your investment-related newsstand pickups, too.  Long-distance phone calls to your broker and investment adviser are deductible, so are parking fees and mileage when you visit them.

Charitable contributions—This is an auditing minefield, so keep good receipts. Pay by credit card and the deduction is taken on the year you made the charge, and not the charge card payment.  Don’t forget receipts for cash transactions, too.  If you donate through your company payroll, save your annual report.

Donated items— Items dropped in a donation box also bring on auditing risks because you don’t get a receipt.  Many feel more comfortable either dropping items off directly at the nonprofit, or having the nonprofit pick them up.  Most will give you a receipt where you fill in the amount.  If you’re not sure how to calculate value, ask the charity for a suggested amount.  Be fair about actual value.

Educator expenses– If you’re a K-12 teacher, aide, instructor or principal, you may be able to get an above-the-line deduction of up to $250 for materials such as books, supplies, or equipment. 

Higher education expenses—If you or your kids attend college, the American Opportunity Credit is worth up to $2,500 per undergraduate student.  A Lifetime Learning Credit is worth as much as $2,000 per return. Compare and see what’s best.  

Continuing Education courses:  You can’t deduct expenses to qualify for a new business or profession. However, you can deduct continuing-education courses taken to either maintain your business/professional license, or to enhance your  business-related skills. 

Business gifts and Greeting Cards:  Greeting cards to clients and prospects are a deductible advertising expense.  Gifts you purchase for clients are deductible but limited to $25 per person per year.  Companywide gifts are deductible in any amount, as long as it’s reasonable.

The April 18th filing deadline is thanks to Emancipation Day in Washington, DC.  This District of Columbia holiday, celebrated on April 15th this year, honors Abraham Lincoln’s freeing nearly 3,100 slaves nine months prior to his Emancipation Proclamation.  

These tips are meant to be guidelines only. Restrictions apply in some situations.  The IRS has a very comprehensive tax website, even an online filing system.  You can access their information through www.irs.gov , or toll free 800-829-1040, or consult your tax professional with any tax questions you may have.

Luxury Condo Sales Up 177%!

In a further sign of a market turnaround, Northwest Multiple Listing Service has released data showing that 23 luxury condominiums, priced at over $1 million, have closed during the first three months of 2011!  This compares with only 13 sales in for the same period in 2010.  Better yet, another 13 multimillion-dollar homes are currently pending. This will provide a strong lead-in for second quarter, and it’s a powerful indication that a luxury home sales trend is firmly in place– and accelerating.

Why now?  More market liquidity because contingent homebuyers are successfully selling their homes, enabling them to now buy a condo. Mortgage financing has loosened up over the past year for qualified buyers.  The economic outlook is improving, and so is buyer confidence.  Seattle enjoyed a number of huge commercial real estate transactions in 1Q11, and job opportunities are resurging.  

Those are all good reasons, of course, but more telling was the shift in momentum when November 2010’s Washington State Ballot Measure I-1098, which would have imposed a state income tax, took a pounding at the polls. We heard from a number of buyers, primarily from outside Washington, whose decision to purchase a multimillion-dollar home was contingent on the outcome of that vote. Not having a state income tax is an influence which may have been flying under the radar for some time, but it is now proving to be a real dealmaker in deciding to buy a Washington State property. Out-of-state buyers are snapping up homes for business, pleasure, or both. Baby-boomers are booming here too.  Retirees are either looking to downsize to condominiums, or to spend time in multiple homes in different states. All in all, prospective buyers are getting more savvy about investing in Washington State– no income taxes, sharpened prices and a lock-and-leave lifestyle.

And the good news keeps coming. The Washington State Department of Licensing reported a 25% increase in drivers license registrations as of February 2011, compared with 2010 (based on a rolling 12-month period). One-third of 11,237 new state residents relocated to King County.  And, thanks to the 2010 U.S. Census, Washington State grew enough over the last decade to snag another congressional seat, plus another vote in the Electoral College.

No high-rise condominium project has broken ground in Seattle since 2007.  That’s when the housing market peaked, and a global credit crunch either deferred or canceled dozens of projects. It’s safe to say that Seattle was saved from overbuilding! 

We now find that the majority of the most premier, view-oriented units have been quietly absorbed. Inventories at the most preferred properties are finite and prices are firming up. There’s a flight to quality, and sales occur where the value is present.  Some examples:

•  Fifteen Twenty-One Second Avenue, a tower averaging nearly $2 million per unit, is 77% sold with seven new sales pending during the past 45 days alone.

•  Olive 8 has sold 18 homes since the New Year, with only a few of the coveted northwest corner units remaining.

 • Escala has effectively sold out of its larger west-facing plans.

•  Fifty homes have either closed or sold at Bellevue Towers since the beginning of this year.

 • Harvard & Highland, which opened in November 2009, have closed 22 of their 38 homes, with five pending.

•  200 West Highland, which went on the market in November 2010, is down to only two homes out of an original number of 17. 

Currently, 65 condominiums priced at over $1 million are on the market  in King County.  There are all kinds of wonderful places for sale, and we’re in the know about which ones can best fit your lifestyle.  Send an email to urgent@stroupe.com, and let us work on the perfect home for YOU!