By Jim Davis The Herald Business Journal
LYNNWOOD — Walk through the door of the clubhouse at Altia apartments and the first thing you see is the black stone fireplace with cozy flames.
Just beyond is a game room with a tan-cloth pool table. A fitness room is down the hall with treadmills overlooking Martha Lake.
The attention to detail can be seen everywhere. In all the common rooms, iPads are mounted so people can plug in to watch their own television shows and listen to their own music.
It’s not just a heated swimming pool. It’s a heated swimming pool with a fountain. It’s not just a table. It’s a table with an outsized found-wood bowl as the centerpiece.
“This is just little ways of putting on that extra special touch,” said Karen Xenos, Altia’s manager. “When you live in an apartment, it’s about that experience. It truly is.”
Altia is one of several new apartment buildings sprouting up where 164th Street meets I-5, just north of Lynnwood’s city limits. More than 2,600 apartments, townhomes and other units are being built or are planned within just a few miles of the intersection.
The most dramatic at the moment are several mid-rise apartment buildings taking shape on Ash Way just to the west of I-5.
“I find it kind of amazing how much construction is going on every time I drive by there,” said Paul Krauss, the city of Lynnwood’s community development director.
There are many reasons for the apartment boom including, land-use laws that encourage the development, a line of thinking that people want more choices in housing and just the sheer demand for it.
“We’re blessed in this region to have robust job growth and our demand is fairly high while our supply is somewhat constrained,” said George Petrie, CEO and president of Goodman Real Estate in Seattle, which built the 230-unit Altia apartments on Larch Way and is constructing a 383-unit apartment project called Tivalli along Ash Way.
The recession is partly at the root of the apartment projects, said Matthew Gardner, principal of Gardner Economics, a land use and development advisory firm in Seattle.
During the mortgage crisis, most development stalled for years. Afterward, banks shied away from lending money for single-family home developments. Instead the projects considered viable were apartments.
That’s why there’s been a huge boost in apartments in downtown Seattle over the past few years, Gardner said.
“We’ve now reached a point where the urban market is potentially saturated and developers are looking at these secondary markets outside of the urban core,” Gardner said.
Secondary markets like Lynnwood that have manageable commutes to downtown Seattle, the east side and Everett and reasonable transit options.
Gardner feels there continues to be a demand for new apartments, saying the population in the area is growing dramatically while development has been slow.
And the rental market appears to back him up.
Rental rates were at an average of $1,009 a month in Snohomish County in fall 2013, said Mike Scott, president of Depree + Scott Apartment Advisors.
That’s up 5.7 percent from 2012 when the rates were $955 a month. And it’s up from $922 a month in 2011.
“That’s a pretty significant increase,” Scott said. “We haven’t seen increases like that in Snohomish County since 2008.”
A couple of the apartment projects are slated to open within the city of Lynnwood. An eight-story, 308-unit building is planned at 19427 40th Ave. W. at what is considered Lynnwood’s city core. It’s being built by a development group called Lynnwood City Center Living Associates. The plan is for the apartments to be leased to people 55 and older.
“We do expect that will start construction by the middle to the end of this year,” said Sarah Wagner, a project manager with the Morgan Design Group, which worked on the project.
Lynnwood Place is planned at 3001 184th St. SW, once home to Lynnwood High School. Cypress Equities wants to construct 330 apartments with retail stores, restaurants and offices located on the street level.
Much of the development is occurring outside of Lynnwood in unincorporated Snohomish County in land designated as an urban center, which encourages apartments and townhomes.
Someone who has had a front-row seat for the new development at 164th and I-5 is Larry Sundquist.
He built the Newberry Square apartments a decade ago across Ash Way from the Tivalli project.
“I guess like anybody else, I’m concerned about traffic,” Sundquist said. “There’s a lot of traffic that comes out on Ash Way.”
He notes that his project is a mixed use, meaning that businesses and restaurants are built on the same property as the apartments.
The apartments across the street have many amenities, but they don’t have businesses built on site.
The people who will be living in those apartments will be looking to Lynnwood for services, Krauss said.
“You’re talking about large numbers of people who will one day be our residents,” Krauss said. “Even before that, they will look to shop in Lynnwood, they will look to dine in Lynnwood and they will look to go to a movie and get other commercial services in Lynnwood.”
Snohomish County has already declared 164th as at “ultimate capacity,” which allowed the county to approve more housing in the area without having to add lanes to fix stalled traffic. Instead, the county has pushed residents to ride buses.
But transit hasn’t kept up with growth. The park-and-ride at Ash Way is operating at 110-percent capacity.
Or as Krauss puts it: “It means you’ve got to be careful, because people are parking in fire lanes.”
Both Sundquist and Krauss can see why people would want to live in the apartments in the area. They both have kids who lived longer at home while looking for full-time work during the recession.
Krauss said many people like living in Lynnwood even though they work in Seattle or at the University of Washington.
“A lot of people they’re not looking for a longer drive out to an 8,000-square-foot lot with a single-family house,” Krauss said.
Petrie of Goodman Real Estate said they’re hoping to attract Baby Boomers who may want to “right-size” out of their homes into an urban apartment lifestyle.
“They’re looking for a less demanding place where you can show up and live,” Petrie said.
The apartments can also appeal to a younger generation who are establishing themselves in their careers.
To attract these renters, his apartments come with amenities like the iPads in the wall at the Altia apartments and a full basketball court and a yoga room at Tivalli.
“‘If you build it, they will come,’ — no that doesn’t work,’” Petrie said. “If you build what they want, then they will come.”