LYNNWOOD — The recent purchase of an office building near the Lynnwood Convention Center represents a milestone, of sorts, for the city and the seller.
That’s because the buyer is Mike Mastro, one of Seattle’s most prolific real estate developers. He bought the Washington Energy Services building at 3909 196th St. SW from Lynnwood-based Olympic Capital Group for $7,075,000 in a sale that closed last January.
Washington Energy Services is a Seattle-based company that sells furnaces, air conditioners and other house-related and energy efficiency products. The Lynnwood site is its only non-Seattle location.
Mastro, through his company Mastro Properties, has bought and sold commercial and residential properties throughout the Puget Sound area. His company also is investing heavily in a condominium project that is part of Everett’s redevelopment efforts.
Lynnwood city officials say they see the sale of the Washington Energy Services Building, the former site of a Cadillac car dealership, as a good sign for the future as the city embarks on its City Center plan to redevelop that section of Lynnwood into a residential and commercial hub close to I-5.
“I think that’s a strong indication that our vision for the City Center matches up with the potential for the marketplace,” said David Kleitsch, the city of Lynnwood’s economic development director.
Rising real estate values in Lynnwood are attracting developer — and investor — interest, Kleitsch said.
“The value there is the land,” said Gary English, chief financial officer for Mastro Properties.
Olympic Capital Group bought the Washington Energy Services building in 1998, just before the high-tech boom of the 1990s went bust. Three years ago, the company’s principal owner died and Olympic’s been liquidating its assets ever since, said Jim Granger, the company’s senior development manager.
The Washington Energy Services building was the last of its buildings to be sold as the company folds up its tent, Granger said.
Olympic Capital Group built the Lynnwood Corporate Center building, a black box office center along 40th Avenue West and the Sparling Technology Center off of 194th Street Southwest.
Granger said Mastro’s investment should be seen as a good omen for the future.
“I think it’s safe to say he made a substantial investment in downtown Lynnwood,” Granger said. “I think Mastro feels there’s significant potential for development in downtown Lynnwood. He’s usually in the path of something that’s going to happen.”
Mastro was unavailable for comment. His broker, Leo Backer, did not respond to repeated requests for an interview.
Though Kleitsch said he is encouraged by the sale, he cautioned that a hot real estate market can also attract unwanted levels of speculation that drive prices out of reach. Too much investment too soon can actually delay development rather than speed it up, he said.
“(Developers) who come in on the front end are inherently taking risks,” he said. “Our thought is that if they’re coming in as speculators, we don’t want to get prices that are above the market.”
Granger said now that the building widely referred to as the Alderwood Cadillac building has been sold, the city needs to get serious about its role in spurring investment for its future downtown.
“It’s time for the city to do something in the city center,” Granger said. “Now that they’ve got the comp plan done, the murkiness is done; we can deal in absolutes. The question now is, what’s the city going to do?”