“I’m of the belief that we have already started to feel the impact of the new supply. It could be from prospective renters or existing renters who are now considering homeownership, or just the sheer glut of available units on the market targeted to the upper 25-33 percent of the renter pool. There is definitely going to be some softening,” said Pettit, senior vice president of Pillar Properties, a privately owned company capitalized by the R.D. Merrill family.
In early 2016, renters will begin moving into Pillar’s newest community, a 254-unit apartment building in the heart of downtown Bellevue, a popular small city east of Seattle.
“Rather than being the little sister to Seattle, Bellevue has emerged as its own city at this point,” said Pettit. Buoyed by Microsoft’s presence, the growing city has a population of around 136,000 and has become a popular destination for shopping and dining.
As 2015 comes to a close, Pettit updated us on his company’s projects and progress. The company moved up from the Puget Sound’s No. 22 fastest growing company to No. 7 this year, and has expanded from fewer than 10 team members four years ago to 74 today.
MHN: Tell us about The Meyden, your new property in Bellevue.
Pettit: It sits on the southwest corner of the intersection of Bellevue Way and Main Street, just south of the hustle and bustle of all the Bellevue high rises but still right in the downtown core in an area known as Old Bellevue. As its name suggests, is the historic part of Bellevue. It has much more of a small town USA feel and a tremendous amount of character. With Microsoft’s offices downtown and the recent development, Bellevue has been on a rapid pace of growth and had some significant material change over the last few years.
MHN: Where does The Meyden get its name from?
Pettit: Instead of branding every single one of our buildings as Pillar—Bellevue or Pillar—Kirkland, we come up with a unique brand for each building. Given that our company is backed by the descendants of timber family with 125-year presence in the Northwest, we also cater to the historic side of the neighborhoods. The name The Meyden comes after William Meydenbauer, who was one of the original settlers of Bellevue. We shortened it to The Meyden and feel it’s got a contemporary and catchy flair to it. So we have our own spin, but it still plays tribute to one of Bellevue’s original settlers.
MHN: What are some features of the property that you’re excited about?
Pettit: First and foremost, we focus on the residential units themselves. Without quality floor plans and finishes, your building is going to struggle no matter what market you are in. From there, we focus on unique opportunities to capitalize on what tend to be exceptions to the residential living spaces. These are places that people can congregate and relax. If they choose to work from home, it gives them an opportunity to work in a quiet environment. But also places where people can kick back, relax, and have fun with friends. We don’t corner ourselves into a particular use with our amenity spaces. We make sure that we can adapt to changing tastes and preferences of our residents.
MHN: You are known for nice gyms, though?
Pettit: We put a lot of emphasis on the fitness center. Rather than just create a fitness center that’s more of an afterthought, we put the thought in and design them to be as close as possible to any professional athletic club that they have the option to join in the area. They don’t have to go pay additional monthly fees to work out somewhere when we are providing them with a similar experience right in their own building.
MHN: How would you summarize 2015?
Pettit: 2015 has completely surpassed all expectations that I had. I think a lot of it is due to the high quality of the assets we own, but more importantly the quality of the team members that are managing these assets. I really do think that sets us apart from the competition.
There is no getting around the fact that Seattle is still in the middle of a historic period of growth for the multifamily industry. Look at the new inventory from the past two years, the projected deliveries over the next two years, or the double digit rent growth that we’ve been able to achieve in our own portfolio. I don’t think there’s anybody out there who could tell you that they truly saw this happening the way it has.
MHN: What do you see ahead for 2016?
Pettit: I can’t sit here and tell you I think it’s going to continue for the long term. As with any market or cycle, there are ups and downs. The amount of supply we have coming on to the market is significant, and that’s not just overall supply, but units targeting the top third of the renter market, from an income-demographic standpoint. We’re only going to face more and more competition as we go.
MHN: What are you most proud of achieving this year?
Pettit: The fact that our team members voted Pillar Properties as one of the Puget Sound Business Journal’s Best Workplaces in 2015 is a tremendous accomplishment to me. That just goes to show that people not only love what they do on a daily basis, but love being a part of our team. We ask a lot of our team members and at times we push them extremely hard.
Of all the awards, recognition, accolades that we have received as a company, or honors for our individual properties, or even my MFE award as the 2013 Rising Star of the Year, to me, none of those come close to the excitement that I had and our team collectively had when we were named to the Puget Sound Business Journal’s list of the 2015 Washington’s Best Workplaces.