Europe's crisis hammers some local companies
The economic woes in Europe showed up in the quarterly earnings of some Pacific Northwest public companies. Also, Seattle and Bellevue are in line for still more apartments; and small-business bankruptcies in the region are down sharply.
By Seattle Times business staff
As the European debt crisis continues to fester, its effects have begun to show up in the financial reports of U.S. companies — including several in the Northwest.
This past week, for instance, Expeditors International reported a 12.1 percent drop in its European revenues compared with the same quarter in 2011 (the figure includes an unspecified but likely small amount of African business).
Second-quarter earnings at other local companies show a range of results — and not all were negative.
Everett-based Intermec saw revenue from Europe, the Middle East and Africa (EMEA) fall more than 20 percent versus last year's second quarter; that followed a 17 percent year-over-year drop in the first quarter. Intermec, which makes bar-code scanners, radio-frequency ID tags and related devices, normally derives about a third of its sales from the EMEA region.
European revenues fell nearly as much last quarter at Paccar, the Bellevue-based truck maker, compared with the same period last year; they were off 5 percent from the first quarter. However, growth elsewhere more than offset that decline.
Not so fortunate was Spokane-based meter manufacturer Itron. It got off easier, with a 13.9 percent decline in EMEA sales from the year-earlier period and a 2.3 percent sequential decline. However, since the company gets nearly 40 percent of its revenue from that part of the world, total revenue was down 5.4 percent.
But not every company saw its Eurosales plummet. EMEA revenue at Seattle-based F5 Networks, for instance, was up 27.3 percent over last year's second quarter; Kent-based Flow International saw its EMEA sales jump 59 percent over the past 12 months, and nearly 20 percent from the first quarter.
And to the south, Nike proved once again that the most powerful economic force in the world may be consumers' lust for overpriced sneakers.
Nike's second-quarter sales were up in every region of the globe; it even eked out a 2.2 percent gain in Western Europe.
— Drew DeSilver, firstname.lastname@example.org
More apartments are on the way in Bellevue, Seattle
Developers continue to build apartments in and around Seattle at a record pace, and the boom shows no signs of slowing.
Some recent developments:
• On the last day of July, Skanska USA bought a prime, vacant acre in downtown Bellevue, across Northeast Eighth Street from The Bravern's shops and office towers, and announced plans for a 12-story, 259-unit complex called Alley 111.
It's the first local foray into the apartment biz for Skanska, which has office projects in the works in Fremont and South Lake Union.
Previous owners of the Bellevue site had proposed a 12-story condo tower, then a 23-story mixed-used project with shops, a hotel, medical offices and condos, but those projects never got anywhere.
Skanska bought the property for $11 million, according to county records.
The company says it'll be at least early next year before it gets all the needed permits for Alley 111.
• HB Capital of Seattle won city approval late last month for a 27-story, 298-unit apartment tower at Third Avenue and Cedar Street in Belltown — then sold the property and plans this past week to national apartment developer Wood Partners of Atlanta for $13.2 million.
Steve Orser, who heads Wood's Seattle office, said construction should start within weeks.
Wood is a newcomer to the Seattle market. Its first local project, Jasper in Wedgwood, opened just last month.
It's already 60 percent leased, Orser says.
• Wood's enthusiasm for its Third and Cedar project probably is fueled in part by the success of Alto, the 17-story apartment tower just across the street that opened this spring.
Developer Harbor Properties — now Harbor Urban — broke ground on the project in late 2010, when most developers still were licking their wounds from the recession. It was the first high rise to start construction in Seattle in more than three years.
While thousands of apartments are under construction, Alto is one of relatively few projects that's actually coming to market this year. Its 184 units all were leased within four months, an impressive pace.
Harbor Urban recently put Alto up for sale. Broker CBRE's listing brochure doesn't include an asking price — but it does provide some insights into just how much renters are willing to pay these days for an apartment in a new building in the heart of the city.
Alto's apartments average 597 square feet, according to the brochure. Rents? They average $1,713 a month.
• Finally, way upstream in the development pipeline, there's Principal Financial Group's proposed 38-story downtown tower at Second Avenue and Stewart Street.
When Principal's plans for the hotel/residential project became public this past week, the only information about it was a single paragraph in the city's land-use permit database. Blaine Weber of Weber Thompson, the architectural firm designing the tower, called later to provide a few more details.
The 367 residential units in the project will indeed be apartments, not condos, he said.
And, while the tower would be built on the site of the 98-year-old, two-story MJA Building, its upper floors would cantilever out 15 or 20 feet over the 10-story Broadacres Building next door, at Second and Pine.
Principal conveniently owns both properties. A city design-review meeting on the project probably still is a couple months away, Weber said.
— Eric Pryne, email@example.com
Wave of small-biz bankruptcies is receding here
Small-business bankruptcies in the Greater Seattle area declined more than in any comparable West Coast metropolitan area over the past 12 months.
Such bankruptcies fell 58 percent in the second quarter of 2012 compared with a year earlier, according to new data from Equifax, a credit-reporting agency.
Nationally, small-business bankruptcies decreased by 16 percent.
The Seattle area reported 36 small-business bankruptcies in the quarter.
The only similar-sized West Coast area with fewer bankruptcy filings was the San Francisco Bay Area, with 27.
Across the nation, only four of 38 similar-sized metropolitan areas tracked by Equifax showed a larger percentage decrease in small-business bankruptcies; those were Cincinnati, Ohio; Las Vegas, Columbus, Ohio and Providence, R.I.
The number of bankruptcies is the lowest for the second quarter since 2007; the number peaked in 2009 at 105.
While the shrinking number of bankruptcies may be due to improving fundamentals, there could also be other factors at work, such as changes in how creditors deal with struggling business debtors.
Attorney John Rizzardi of Seattle law firm Cairncross & Hempelmann said that in some cases lenders are pressing for receivership, rather than bankruptcy, as an alternative for troubled borrowers.
And sometimes lenders and debtors are negotiating forbearance arrangements, which give debtors more time to pay off debts through liquidation of assets or refinancing, said Rizzardi.
— Johanna Somers
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