Builders are opting for apartments over condos, experts say, because they don’t face the liability of being sued under the state’s condominium act. Some condo builders still bear fresh memories of multimillion-dollar settlements with homeowner associations. “You’re finding developers saying, ‘Why take the risk of building a condo?’\0x2009” said Matthew Gardner, chief economist at Windermere Real Estate. “Whereas in today’s environment, you can build an apartment, get it half leased up, sell it to an institutional investor and walk away.”
Such concerns didn’t stop Canadian developer Nat Bosa from building the two-tower Insignia complex in Seattle’s Belltown neighborhood. Of the 698 units for sale, over 75 percent are sold, according to a Bosa spokeswoman. As is customary with new construction, buyers who had put down deposits began closing on their homes when the units were ready for occupancy. Sales of 222 units have closed in the South tower, which opened in July. The North tower will open next summer.
“I cannot figure out how he’s making any money,” said Brian O’Connor, a Seattle consultant who conducts feasibility studies for developers. “New condos don’t pencil. They’re not selling for a high enough price.”
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