Fortune Group

The same “big three” forces that drove apartment development in Seattle five years ago still push it today, says Mark Raabe, president of Fortune Group.

Growth management, traffic congestion and downtown vitality continue telling Fortune, and other residential developers, to build and build, Raabe said.

All three motivate growing numbers of people to want to live within the city, whether it’s next to downtown or in the surrounding neighborhoods like First Hill, Capitol Hill and Queen Anne.

“There’s a fourth thing, now,” Raabe said. “The concentration of jobs” from an influx of technology companies into the downtown area.

“Those four things have driven our strategy for the past five years, but now more than ever,” Raabe said. “Close-in in-fill locations are going to be at a premium.”

A fifth force is missing.

“Schools,” said Raabe, who lives in Bellevue because he has two children. “But in-city living is certainly appealing to many other demographic groups.”

Fortune thus plans to keep projects flowing through its pipeline.

The Seattle-based apartment developer has two under construction now: 72 apartments on First Hill called The Jeffrey Apartments and 62 units on Capitol Hill called The Carrington.

Fortune plans to break ground on one more this year, 75 apartments in the International District at Seventh Avenue and Lane Street.

Behind those in the pipeline for construction in 2002, Fortune has 55 apartments in Ballard, two apartment buildings near each other in Lower Queen Anne (80 and 55 units), and a large one on Capitol Hill.

The Capitol Hill project totals 250 apartments above first-floor retail where a shuttered Red Apple grocery store is now located on Pine Street between 14th and 15th avenues.

Fortune has a contract to buy the Red Apple site and plans to apply for its city master use permit later this spring, Raabe said.

Data show other developers are following the same forces.

Seattle apartment consultants Dupre + Scott tabulated that 3,100 new apartments were built in King County last year and estimated 3,800 will be constructed for this year.

Then in 2002, 6,600 will be built, the firm projects.

The area surged like that in the late 1980s, too, reaching a peak production of 6,600 new apartments by 1990. The volume fell to 2,000 new units in 1994 and 1,000 in 1996 before starting its upward surge again.

Raabe said that lately it has grown harder to create suburban apartments because rent increases haven’t kept pace with rises in land prices.

“The rents just don’t seem to justify the cost of new construction,” he said. “The disparity is so huge. In premium locations (in Seattle) we’ve broken through the $2 per-square-foot barrier. In suburban, it’s $1. True, it’s cheaper to build in suburban, but not that much cheaper.”

Fortune recently paid about $1.50 a square foot of land for its sites at the junction of Lower Queen Anne and Belltown. The firm paid about $60 per square foot in Ballard.

A couple of years ago, the firm controlled six apartment sites in the South Lake Union area, collecting them at below $60 per square foot of land. Microsoft co-founder Paul Allen bought four of the sites and other buyers took the other two. Land in South Lake Union now goes for $100 or more per square foot, Raabe said.