The picture painted by real estate professionals of the commercial market in Kitsap County is somewhat fuzzy. There aren’t any statistics available on leasing and although property sales are all recorded, it’s difficult to get accurate information on exactly which properties that changed hands are commercial and which are residential. Therefore, we relied on a handful of active commercial real estate professionals for information.

According to most local commercial real estate practitioners, it’s busy, but not as busy as it could be. That’s due to a number of factors and most, but not all, agreed that the perceived no-growth, anti-business politics of the county, coupled with a non-availability of buildable, industrial land due to the zoning imposed by the comprehensive plan were major problems.

On the retail and office side, business was steady, but there is still lots of space to choose from. The area with the least amount of vacancy is Bainbridge Island, which has seen all the office and retail space created in an ongoing two year building boom gobbled up usually before it’s finished.

“Leasing is good, although there’s not a lot of product at the moment,” commented broker Jerry Knipe of The Sunrise Group, a commercial real estate firm on Bainbridge Island. “Last year, we probably absorbed and leased 40,000 sq. ft. of retail and office space, and basically, what I have this year is infill on those existing projects.”

He added that on the sales side, business has continued to be strong, “...but it’s a small market. I know of three or four projects last year that were sold, and this year we have a couple on the way. There’s also some new developments being built or planned right now.”

When asked where the business was coming from, Knipe didn’t hesitate to say, “From Seattle — situations where the principals live here and move their businesses.” He also said that some, especially the leasing of industrial space, was from the growth of existing companies on the Island, and that the rest was from out of the area.

“It’s hopping,” said Jim Freeman of Coldwell Banker. “Retail is exceptionally strong in almost all areas of the county. Vacancies are low and rents are rising in key markets like Silverdale and Port Orchard.”

In the office sector, Freeman allowed that things are probably better than they were a year ago, “...but its not as strong as retail. Rents are stable as are vacancies, he said. “I haven’t perceived a lot of new demand for office space in Silverdale, while Poulsbo is pretty hot. Most of the current inventory of office space is in Silverdale.”

Bradley Scott in Bremerton is perhaps the largest purely commercial firm in the county. Agent Vic Ulsh, who has been chosen every single year as the best commercial Realtor in the county in the Business Journal’s annual Reader’s Choice poll, was decidedly reserved. He talked more about conditions impacting the commercial real estate business than business itself.

“Business is a little on the slow side,” Ulsh commented. “We’re working with as good a quality of property as any time in my 20 years with Bradley Scott. However, the timeline for getting a transaction closed has substantially expanded during the 90’s.”

When asked why, he cited a litany of hurdles and obstacles that included stricter legal, environmental, zoning, financing, review and approval considerations. “The net result is a slowdown in the time it takes to get a transaction closed. It used to be four to five months, now it’s eight to twelve — if you’re lucky. If it’s undeveloped land, it gets worse from there — much worse.”

He cited the local political situation has having the most negative impact, along with what he termed, “Opposing forces, expanding timelines and a rapidly changing world.”

“The picture the buyer looks at the start of a transaction and the situation at the end of it are often very different because of those factors.”

He also cited “...just plain, better educated buyers. It’s a better educated public we’re working with, — which is good thing.”

Dick Brown of the Kitsap Commercial Group in Port Orchard wasn’t nearly as reserved in his opinions as Ulsh. Known within the industry for unabashedly speaking his mind, Brown also talked more about why business is like is rather than exactly how it is. He laid the blame right at the feet of the county commissioners.

“We’ve had little spurts, but they peter out because places we can put people either aren’t zoned, or have other problems like setbacks, design studies and other problems — problems that I would term artificial. We have a lot of people looking, but not many buying. They’re having too many legal obstacles put in their way. They’re hot to go until they talk to the county.”

He singled out the Bethel Avenue Corridor Plan and more recently imposed Highway 303 corridor restrictions as prime examples.

“The county is more interested in taking the property by the throat rather than letting the market determine where growth should occur based on where utilities and infrastructure are available,” he said. “This is an anti-business administration in the courthouse. They’re more worried about slugs, spiders and birds then they are about family wage jobs.”

Longtime South Kitsap commercial broker Herb Loop seconded Brown. “There’s just not an awful lot of activity right now. Several people we’ve had inquiries from have become very discouraged after going to the courthouse and finding out just what they can and can’t do with a particular piece of property,” he said.

Loop continued, “Interim zoning ordinances and stuff just not zoned, or zoned urban reserved, is a real problem. The county won’t even accept applications for development of that property.”

He also expressed concern for landowners in general as well as the direction the county is headed. “I’m very concerned about what’s happening to our clients and their property. In some cases, their land is all these people have and their rights to use it have been taken away by regulations,” Loop sighed.

Steve Ahlstrom, a commercial broker with Apanage Inc. works with just a few specific developers as well as reporting primarily on industrial land and office space. He also represents what he called “the industrial Mecca of the whole Peninsula,” Twelve Trees Industrial Park in North Kitsap.

When asked how business was, he chuckled and replied, “It’s usual erratic self. It never does seem to have any consistently to it like in Kent, Redmond and those places on the other side. Over there you can expect a certain absorption rate. Guys will speculate on buildings, not many people will do that over here.”

When asked if he attributed that to problems with the comprehensive plan or an anti-business attitude on the part of the commissioners, Ahlstrom laughed and answered, “I cut my teeth in this business in the south end of King County where there’s always been a good healthy growth pattern. Over here, they’re fine, they’re as good as you’ll find. If you want some real problems, go work in King County or Snohomish County.”

Ahlstrom said he’s working on three new buildings at Twelve Trees — all for existing Kitsap County businesses in an expansion mode.

Joe Michelson of Windermere Real Estate in Silverdale is a long time commercial broker working in Central and North Kitsap. His comments reflected the same general theme as everyone else we talked with.

“The problem is there is so little land available. It’s probably as bad as I’ve seen it,” he said.

He did say that some of the larger retailers are active in the market as are small business people. “We’re seeing retailers typically trying to upgrade their space by going to different locations, leaving empty buildings. But what we’re also seeing is a number of projects that individual users are building for themselves. The owner-user, the guy who owns his own business and wants to have his own building, is still very high on Kitsap County. There just aren’t very many outsiders coming in.”

Frank Leach, managing broker at the John L. Scott office in Silverdale is also personally active on the commercial side. He seemed the most upbeat about the long term prospects for the commercial market here.

“The market seems to be getting much stronger. Leasable space in Silverdale is beginning to get pretty tight. We’ve got a lot of interest from people on the other side, but I think a lot of them are trying to sort out exactly what Kitsap offers, and if we have a good enough employee pool here,” he stated.

“There are a number of companies on the other side trying to decide how long they’re going to put up with the I-5 and I-405 corridor problems. They’re seeing some employees come to work all stressed from the traffic, and it reflects in their work. While others that commute on the ferries are more relaxed and productive — and that isn’t lost on some of those companies. It’s ironic that they’re commuting because they can’t afford to live over there,” he added.

Leach summed up the situation by saying, “The EDC needs to package up something that details exactly what we have to offer and then go over there and sell the heck out of it. That should make a difference.”.