Sterling loan unit buys Terrace building
Sterling Savings lending unit buys a symbol of the mortgage crisis
Five years ago, a high-profile mortgage lender was hosting its own bankruptcy auction in the office building at 6021 244th St. SW, just east of I-5 in Mountlake Terrace. Today, one of the state's largest independent banks owns the building and has placed its thriving home loan division there.
Sterling Savings has filled the four-story building, containing just under 60,000 square feet of space, with its home loan division's executive, operations and sales offices, along with the bank's escrow services and its Puget Sound real estate group, bank spokeswoman Andrea Worley said. The bank bought the building last year.
The location of the home loan office for the Spokane-based bank isn't accidental. Sterling Savings' home loan division was formerly known as Golf Savings Bank, which had been based nearby for 30 years. With a need for more space, Sterling looked at leasing several buildings in the area, but "this building worked out as the better choice to purchase," Worley said.
"This is consistent with our commitment to expand our services and increase market share in the Puget Sound" area, Ezra Eckhardt, Sterling Savings' president and chief operating officer, said in a written statement.
Sterling Savings' holding company, Sterling Financial Corp., has assets of $9.6 billion and more than 180 branches in five states. It ranks among Washington's top 10 banks in market share and is the second-largest bank based in the state. It also is one of the Northwest's more active residential lenders.
The bank's busy lending operation in Mountlake Terrace echoes back to the middle of the past decade, when Mortgage Investment Lending Associates Inc., better known as MILA, filled the building with hundreds of employees. The wholesale mortgage firm, specializing in subprime loans, grew dramatically during the nation's home-buying spree. At its height, MILA employed 700 people in Mountlake Terrace and Lynnwood and ranked among the nation's largest subprime lenders.
But by late 2006, MILA was laying off hundreds of people. After abruptly closing its doors in April 2007, the company filed for Chapter 11 bankruptcy. The firm's founder and CEO, Layne Sapp, said the deflating housing market bubble and Wall Street's tightening credit had left him with no alternative.
In late September 2007, the MILA building hosted hundreds of bargain hunters who carted away computers, office chairs and potted plants during a bankruptcy auction, one of the steps taken to liquidate MILA's assets.
The 20-year-old building, still owned by Sapp's CRS Financial, stood empty until Sterling bought it for $5.85 million, according to Snohomish County Assessor's Office records. That was slightly less than the $6 million that CRS Financial paid in late 2002. The structure and the three acres it sits on have an assessed value of $9 million.
Sterling's purchase and occupation of the building is a welcome bright spot for the south Snohomish County office space market. While demand for office space has picked up in Seattle -- especially in the newly developing South Lake Union area -- and in Bellevue since 2010, office properties in the suburban areas have not fared as well.
While technology firms once filled office complexes in Bothell, Lynnwood and other south Snohomish County cities, such businesses in search of space today are more likely to locate close to downtown Seattle to attract the best talent, the Seattle office of Colliers International reported earlier this year. That's meant a nearly stagnant market for office space in south Snohomish County during the past year.
Jon Bauer, a vice president at commercial real estate broker CBRE who at one time marketed the MILA building, agreed that Seattle and Bellevue are showing more signs of improvement in office space demand than Snohomish County and other outlying areas. "It's still slower than we'd like overall," he said.
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