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Lose your job? No worries, they'll pay your mortgage
Thornton Place, a big, new mixed-used project near Northgate, is offering prospective condo buyers a layoff-protection plan in hopes of boosting sales.
Seattle Times business reporter
First cars. Now condos.
Thornton Place, a big, new project near Northgate with cinemas and a creek, is offering prospective condo buyers a layoff-protection plan in hopes of spurring sales in this sour market.
Buy a condo, the developers say, and if you lose your job within a year they'll make your mortgage payments for up to six months.
It's a variation on a theme pioneered by automaker Hyundai, which since January has let buyers return new cars if they get laid off within a year.
Thornton Place's 109 condos have been on the market since last summer. None has sold, and now the complex is nearly finished.
"We were looking at what would get people off the fence," said Jeff Cook, president and chief operating officer of Stellar Holdings, one of the companies building Thornton Place. "We think there's a pretty big pent-up demand for housing."
Condos, like single-family homes, have been selling at a snail's pace. Just 205 closed in King County in February, according to the Northwest Multiple Listing Service — down 48 percent from the same month a year earlier.
Some developers are auctioning off unsold units at steeply discounted prices. Others are offering buyers incentives: No homeowners' association dues for a year, for instance, or a promise to refund the difference if the asking price for similar units drops.
But Thornton Place is the first condo project locally — perhaps nationally — to offer an incentive that directly addresses consumers' qualms about losing their jobs, said Seattle land-use economist Matthew Gardner.
"It's thinking outside the box," he said. "I think it's very thoughtful."
There's plenty of fine print in the offer. It's limited to 27 condos that are the targets of a new marketing campaign that launches this week. They start at $299,950 for a 595-square-foot one-bedroom unit.
The developers will pay no more than $2,500 a month, principal and interest only. The condo must be the buyer's primary residence.
And the offer expires May 25, as do other buyer incentives from Stellar and its partner, Lorig Associates.
Glenn Crellin, director of Washington State University's Washington Center for Real Estate Research, said he's never heard of such an offer before.
"It tells us what we already know about the market, which is it's really rough out there — especially for condos and especially for new construction," he said.
"It [the offer] amounts to a $15,000 potential expenditure on their part. But if they can sell the unit now, that's probably not much compared to the cost of carrying it for another seven or eight months."
Other businesses around the country have followed Hyundai's lead in trying to drum up business by addressing layoff fears. Airline JetBlue is offering to refund fares to passengers who book and pay for flights, then lose their jobs.
The manager of 144 California apartment complexes recently announced it would let new and renewing tenants break their leases if the primary breadwinner is laid off.
Thornton Place is being built on what once was Northgate Mall's sprawling, underutilized south parking lot. It is the product of years of negotiation between the city, neighbors and developers.
As part of the project, the South Fork of Thornton Creek, which for years ran in a pipe under the property, is being restored.
In addition to the condos, Thornton Place will have 278 apartments, a 143-unit senior community, 50,000 square feet of retail and a 14-screen movie complex that includes the North End's first IMAX theaters.
Cook said the apartments should be available for pre-lease around May 1, and the cinema is scheduled to open around Memorial Day.
Two restaurants already have signed leases, he said, and the developers are negotiating with 10 or 12 other retail businesses.
Starting April 1, 350 spaces in the project's garage will be available to park-and-ride commuters who use the neighboring Northgate Transit Center.
Eric Pryne: 206-464-2231 or firstname.lastname@example.org
Copyright © 2009 The Seattle Times Company
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