Deed in Lieu or Foreclosure? What Washington Owners and Lenders Are Choosing in 2026

Two headlines from this week tell you where commercial real estate in our region is right now. On October 21, the Puget Sound Business Journal reported that Keelbase Capital took over The Baxter, an 80-unit apartment building in downtown Bellevue, through a deed in lieu of foreclosure recorded October 14. Keelbase first bought the existing loan from the lender, then took the deed. A day later, the PSBJ reported that downtown Seattle's Central Building is back on the market, three years after it faced foreclosure.

When a loan goes bad, owners and lenders in Washington usually have two ways out: a negotiated deed in lieu, or a nonjudicial trustee's sale. Here's how I explain the choice to clients.

The Trustee's Sale: Washington's Default Path

Most commercial loans here are secured by a deed of trust, so the lender can foreclose without going to court under the Deed of Trust Act, chapter 61.24 RCW. The deed of trust must contain a power of sale, and the borrower must be in default (RCW 61.24.030). A notice of default goes out at least 30 days before the notice of sale. The trustee then records and mails the notice of sale at least 90 days before the auction, including to junior lienholders and tenants of record (RCW 61.24.040).

The trustee's deed conveys whatever the borrower could convey when the deed of trust was signed (RCW 61.24.050). In other words, the sale wipes out junior liens recorded after the deed of trust, and those liens then attach to any surplus (RCW 61.24.080).

The big commercial wrinkle is deficiency. For residential borrowers, a trustee's sale generally ends personal liability. For a commercial loan signed after June 11, 1998, the lender can still sue a borrower or guarantor for the gap between the debt and the property's fair value, but must file within one year of the sale (RCW 61.24.100(3)–(4)).

The Deed in Lieu: A Negotiated Handoff

In a deed in lieu, the owner simply deeds the property to the lender, or to the lender's designee, in exchange for some release of the debt. It's faster, quieter, and cheaper than an auction. It also gives the parties room to negotiate a smooth handover of tenants, records, and service contracts, a cash payment to the owner for cooperating, and the scope of any release.

One Washington rule every guarantor should know: under RCW 61.24.100(7), when a lender accepts a deed in lieu on a commercial loan, the guarantor is released from liability for the debt unless the guarantor agrees otherwise as part of the deal. That makes the guaranty the real bargaining chip.

The Risks on Each Side

• Junior liens. This is the biggest weakness of a deed in lieu. It doesn't wipe out second deeds of trust, mechanics' liens, or judgments. The lender takes the property subject to them, which is why lenders order a title report before agreeing to anything.
• Merger. When the lender holds both the deed of trust and the ownership, the two interests can "merge," and the lien can disappear, letting junior liens move up in priority. Well-drafted deeds in lieu state that no merger is intended, and many lenders keep the loan alive in a separate entity.
• Deficiency exposure. Borrowers should get a written release. Without one, the debt may survive the transfer. Lenders who want to keep a guaranty in place need the guarantor's written agreement, because of RCW 61.24.100(7).
• Title insurance. Title insurers look closely at deeds in lieu. They want an estoppel affidavit confirming the transfer was voluntary and for fair value, so it can't later be attacked as a fraudulent transfer or a bankruptcy preference.
• Tax. Washington's real estate excise tax generally doesn't apply to a deed in lieu given to satisfy a deed of trust (RCW 82.45.010(3)(j)). Federal tax is another matter. A deed in lieu is treated as a sale, and forgiven debt can be taxable to the borrower (IRS Publication 4681). Talk to your CPA before you sign.

What This Means for Buyers of Distressed Assets

The Baxter shows the 2026 playbook: buy the note, then negotiate the deed in lieu. You step into the lender's position and take title without an auction, but you inherit whatever is on title, so a full title and lien review is essential.

Buying at a trustee's sale is different. Title comes clear of junior liens, but you're bidding at a public auction with limited time to inspect, usually for cash, and you take the property as is. Assets like the Central Building that have already been through distress often come back as ordinary listings. That can be the best time to buy, because the capital structure has been reset.

What This Means in Snohomish County

Big Seattle and Bellevue deals make the headlines, but the same pressures are reaching smaller owners in Snohomish County commercial real estate. In Everett commercial real estate, owners of older office and mixed-use buildings who face 2026 refinancing at today's rates are the most likely to be talking to their lenders. The same is true for owners of retail and flex buildings in Marysville commercial real estate and Arlington commercial real estate. Investors watching Mukilteo, Mill Creek, Snohomish, and Monroe commercial real estate should know that note purchases and deed-in-lieu deals rarely hit the open market. They come through relationships with lenders and owners.

Key Takeaways

• A trustee's sale under RCW 61.24 wipes out junior liens. A deed in lieu does not.
• On commercial loans, lenders can pursue a deficiency for up to one year after a trustee's sale.
• Under RCW 61.24.100(7), a deed in lieu releases commercial guarantors unless they agree otherwise.
• Insist on a non-merger clause, an estoppel affidavit, and a title review.
• Washington REET generally doesn't apply to a deed in lieu, but federal income tax on forgiven debt might.
• For buyers, buying the note and then taking a deed in lieu is the quiet way into distressed assets.

Let's Talk

If you're an owner facing a loan maturity, a lender weighing your options, or a buyer hunting for distressed opportunities, I can help with both the legal and the brokerage side. Visit Weitz Commercial or contact me directly.

This post is general information, not legal or tax advice, and reading it doesn't create an attorney-client relationship. Every situation is different, so talk to a qualified attorney and tax advisor about yours.

Everett Light rail update - Fall, 2026

By Nathan, October 15, 2026 Light rail is coming to Everett as we have talked about, and the plan for getting there is now public. On September 18, Sound Transit released the Draft Environmental Impact Statement (EIS) for the Everett Link Extension, a 16-mile line from Lynnwood to downtown Everett with six new stations. Phase 1 would reach the Southwest Everett Industrial Center in 2037, and Phase 2 would reach Everett Station in 2041. The line promises faster trips and new growth, but it would also displace hundreds of households and bring years of construction. The public has until November 2, 2026 to weigh in. What the community gains Faster, more reliable trips. Sound Transit estimates about 33 minutes from Everett Station to Lynnwood and about 60 minutes to downtown Seattle, with trains every 4 to 6 minutes at peak. A direct line to jobs. The Southwest Everett Industrial Center station would serve the Paine Field/Boeing area and its roughly 44,370 jobs. Growth around stations. The Economic Alliance Snohomish County says economic activity is already following Lynnwood Link and expects the same for Everett. With Washington's new law allowing housing in commercial zones, station areas are likely to see new homes and mixed-use projects. What the community gives up Homes and neighborhood anchors. Every Mariner alternative would displace 287 to 300 residences and dozens of businesses, including a library, grocery stores and HUD-assisted apartments. The Ash Way and Broadway/I-5 segments would each displace dozens more homes. A large rail yard. The line needs an 80- to 100-acre maintenance facility. One candidate site would take 186 to 189 residences; another would fill a stream and affect manufacturing jobs; a third would disturb the most wetland. Years of construction. Starting around 2030, nearby businesses face months-long road closures, noise, lost parking and reduced visibility. Small local businesses are the most exposed. Weighing the trade-offs Routes for the Ash Way, Mariner, SR 99/Airport Road and SR 526/Evergreen segments, and the rail-yard site, are still undecided. Those choices will determine which neighborhoods lose homes and businesses and which gain stations. Done well, Everett Link can connect thousands of residents to jobs and bring new housing to station areas. Done poorly, it could push out the residents and small businesses those benefits are meant for, so commitments on relocation help, replacement affordable housing and construction support matter as much as the route. About Us: at Weitz Commercial, we specialize in Snohomish County Commercial Real Estate efforts if you own property or want to explore investment in the area.  Have your say Comments are open through November 2, 2026 online or by email to everettlinkcomments@soundtransit.org. Sound Transit expects a Final EIS in late 2027 or early 2028, with the board's final route decision to follow.

New Washington Commercial Zoning Law - SB 6026

 

SB 6026 Explained: What Washington's New Commercial-Zone Housing Law Means for Snohomish County By Nathan, October 7, 2026 Washington's Senate Bill 6026 took effect June 11, 2026, and it changes what many commercial properties in Snohomish County are allowed to become. In most of the county's larger cities, commercial and mixed-use land must now be open to housing, and cities can no longer require ground-floor retail across most of that land. For owners of aging strip centers, vacant big boxes and oversized parking lots, that opens a new path to value. What the law does SB 6026 has three main parts, according to the Legislature's final bill report. Housing must be allowed in commercial and mixed-use zones. Cities and counties with 30,000 or more people (and non-rural counties) that plan under the Growth Management Act can no longer exclude residential uses from land zoned commercial or mixed-use. Ground-floor retail mandates are capped. These jurisdictions can't require ground-floor commercial or retail as a condition of building housing on more than 40% of their commercial and mixed-use acreage. Affordable housing that is publicly subsidized can't be required to include ground-floor commercial at all. Waivers must be available. Cities and counties must offer an administrative process for owners to ask for a reduction or waiver of ground-floor retail rules, weighing the number of homes the change would add. What's excluded. The housing requirement doesn't apply to parts of a lot that are: in an industrial zone; within 3,200 feet of an active oil or gas refinery; where housing is barred because of a military installation or a public general aviation airport; in a tax increment financing area created before the law took effect; outside the urban growth area; in a critical area or its buffer, or next to shorelines where multifamily is prohibited; or where development would require demolishing a designated historic landmark. Station areas and zones allowing buildings of at least 85 feet also don't count toward the 40% retail cap, so cities can keep ground-floor retail rules there. Where it applies in Snohomish County Six cities in Snohomish County are above the 30,000-person threshold, along with the county itself for unincorporated commercial land inside urban growth areas next to covered cities. Jurisdiction 2025 population Covered by SB 6026? Everett 114,700 Yes Marysville 75,640 Yes Bothell (King and Snohomish counties) 51,760 Yes Edmonds 43,510 Yes Lynnwood 42,540 Yes Lake Stevens About 42,100 Yes Snohomish County (unincorporated) Non-rural county Yes, in qualifying urban growth areas Mountlake Terrace 24,640 Not yet Mill Creek 21,630 No Mukilteo 21,600 No Smaller cities such as Mill Creek, Mukilteo, Monroe and Arlington aren't covered, though they can choose to adopt similar rules. Mountlake Terrace is worth watching: it has grown about 16% since 2020, and it's still well short of 30,000. Owners in any city should confirm their parcel's status with the local planning department, since the exclusions above can apply lot by lot. A local example: the Evergreen Way Walmart For a preview of what SB 6026 is meant to encourage, look at 11400 Evergreen Way in south Everett. The Highway 99 Walmart there closed in April 2023 and has sat empty since. D.R. Horton, the nation's largest homebuilder, now plans to replace it with 248 for-sale homes in a project called Rowan Park (Everett Herald). Site Just under 19 acres Homes 92 single-family, 156 townhomes Replaces ~147,000 SF store and ~715 parking stalls Amenities Playgrounds, dog areas, basketball and pickleball courts Rowan Park was filed in April 2026, before SB 6026 took effect, but it's exactly the kind of project the law is built around: a dark big box and its parking lot turned into homes, with no ground-floor retail required. The City of Everett supports it, saying it fits its South Everett strategy of connecting residents to nearby manufacturing jobs. The Paine Field/Boeing industrial center nearby holds about 44,370 jobs (PSRC). As of May 2026, the project was on a city correction hold pending more information. Watch for preliminary approval and demolition of the old store. This is something that we think will become more and more common in Everett and throughout Snohomish County. The county and state are implementing laws to increase housing and there is an abundance of big box retail and large parcels that will start to turn into these mixed use and neighborhood centered builds. I like this direction and think it is good for the community, we need more spaces and laws like this to promote growth. What it means for owners and investors More potential uses, more potential buyers. A commercial parcel in a covered city can now attract homebuilders and apartment developers as well as retail and office users. That wider buyer pool can support land values on underperforming sites. Retail requirements get easier to remove. If your site carries a ground-floor retail mandate that has kept a project from penciling out, the new waiver process gives you a formal way to ask for relief. Industrial land stays industrial. The law excludes industrial zones, so places like the Paine Field/Boeing manufacturing center aren't affected. That protects industrial owners from residential encroachment. Retail landlords may benefit too. Each big box converted to housing removes retail space and adds nearby households, which can help the remaining well-located storefronts. Timing matters. Cities are rewriting their codes now. Owners who track these updates and comment early will be better positioned than those who wait for the December 2027 deadline. Key dates March 27, 2026: Gov. Ferguson signs SB 6026 in Everett. June 11, 2026: The law takes effect. December 2027: The 18-month deadline for cities and counties to update their codes. After that, state rules override conflicting local regulations. For more information on Snohomish County Commercial Real Estate, please contact our Everett Commercial Real Estate Brokerage.  Scott Weitz Scott@weitzcommercial.com  T: 206.306.4034

2027 Washington Real Estate Excise Tax Bracket updates

Washington's graduated real estate excise tax (REET) brackets move up $26,000 on January 1, 2027. 

The rates themselves don't change, so the effect is a small tax cut for most sales over $525,000 — roughly $47 to $494, depending on price. Every four years, the Department of Revenue adjusts the thresholds under RCW 82.45.060, and this is the 2027 reset.

The new brackets

Each rate applies only to the slice of the price inside its bracket, like income tax brackets. Every threshold rises by $26,000.

State rate	Through Dec. 31, 2026	Starting Jan. 1, 2027
1.10%	$525,000 or less	$551,000 or less
1.28%	$525,000.01 – $1,525,000	$551,000.01 – $1,551,000
2.75%	$1,525,000.01 – $3,025,000	$1,551,000.01 – $3,051,000
3.00%	Over $3,025,000	Over $3,051,000

Classified agricultural land and timberland stay at a flat 1.28% state rate. Source: Washington DOR

What it saves

The savings cap at $494 on the state portion, no matter how high the price goes. That's because only $26,000 slices move to a lower rate.

Sale price	State REET savings in 2027
$525,000 or less	$0 (no change)
$525,001 – $551,000	Up to $46.80
$551,001 – $1,525,000	$46.80
$1,525,001 – $1,551,000	$46.80 to $429
$1,551,001 – $3,025,000	$429
$3,025,001 – $3,051,000	$429 to $494
Over $3,051,000	$494

Two quick examples. An $800,000 home pays $9,295 in state REET in 2026 and $9,248.20 in 2027. A $2,000,000 home pays $31,637.50 in 2026 and $31,208.50 in 2027, a $429 difference.

Year-end timing

The new thresholds apply to sales dated January 1, 2027 or later. DOR treats the date of sale as the date the deed is executed and delivered to the buyer — generally the notarization date — not the recording date.

For a deal already set to close in late December, the savings rarely justify moving the date. A few hundred dollars can be outweighed by a rate lock, a 1031 deadline, a lease end, or a buyer's need to move. Where a closing is already flexible and the price is above $1,525,000, it's worth mentioning so the client can decide.

REET is usually paid by the seller, so sellers are the ones to flag. If the seller doesn't pay it, the buyer becomes liable.

The fine print

• Local REET still applies. Cities and counties add their own REET on top of the state rate, and the 2027 change doesn't touch it. Check DOR's local rate table for the property's location code.
• Ag and timberland are unaffected. Qualifying classified land stays at a flat 1.28% state rate.
• Multiple parcels are added together. When several parcels sell in one transaction, the brackets apply to the combined price.
• Fees don't change. The $5 state technology fee per transfer still applies.

This post is general information, not tax or legal advice. Confirm figures for a specific sale with escrow or a tax professional.

For more information on Buying or Selling Lake Stevens, or Snohomish County Commercial Real Estate, you can find our Everett Commercial Real Estate Brokerage information below. 

Weitz Commercial

Scott Weitz: 206.306.4034

Scott@weitzcommercial.com 

Nathan Cuda: 425.268.9796

Nathan@weitzcommercial.com 

September 2026
Local Perspective.
Real Insight. Real Value.

WC  |  Weitz Commercial

MARKET WATCH

SNOHOMISH COUNTY MARKET UPDATE

THE 9 THINGS WE’RE WATCHING

1. RESIDENTIAL ACTIVE LISTINGS (YOY)

Inventory continues to build compared to last year, giving buyers more options and creating a more balanced market.

2,875August 2026

2,064August 2025

+39.3%YOY Change

2. NEW LISTINGS (YOY)

More sellers are entering the market compared to this time last year, adding to available inventory.

1,286August 2026

1,125August 2025

+14.3%YOY Change

3. MONTHS OF INVENTORY (YOY)

Months of inventory shows how long it would take to sell all active listings at the current sales pace.

3.64August 2026

2.38August 2025

+1.26YOY Change

A balanced market is typically 4–6 months of inventory.

4. MEDIAN SALE PRICE (YOY)

Median sale price has softened slightly compared to last year, reflecting higher rates and increased inventory.

$724,500August 2026

$755,000August 2025

−4.0%YOY Change

5. MORTGAGE RATES (YOY)

Higher mortgage rates continue to impact affordability and buyer demand.

6.67%August 2026

6.59%August 2025

Monthly payment on median-price home ($724,500 with 20% down)

$3,729August 2026

$3,854August 2025

−$125Less per month

6. NOTABLE COMMERCIAL SALE

Notable sale activity as of late September 2026

Bank of America building at 501 N Olympic Ave, Arlington
Listed for $3 million; sold for $2.1 million
7,124 sq ft on 0.63 acres
New HVAC and roof
Owner-operator purchase

Full details available upon request.

7. LEGAL & GOVERNMENT WATCH

The Federal Opportunity Zone program is transitioning to a permanent “OZ 2.0” starting January 1, 2027. See IRS Notice 2026-40.

Key points for 2026 deals

• Deferred gain(s) from the old program generally must be recognized by December 31, 2026.
• New zone designations take effect January 1, 2027.
• Practical takeaway: anyone holding a 2026 gain, a pending 1031/OZ structure, or a project in a current Snohomish County OZ tract needs a year-end plan locked before December 31.

8. POTENTIAL OPPORTUNITY

We see the potential for land purchases at noticeable discounts. Inventory has risen fairly dramatically, so well-positioned land with improved zoning can have notable upside.

9. Scott’s Perspective

Market thoughts.

Well — the verdict is in; even the biggest proponents have to admit we are facing notable weakness across the residential sector. Inventory up 40% YOY; new listings up 14.3%; and median sale price down 4%. Add on that the 10-year Treasury (which sets mortgage rates) is at historical highs. It’s hard to make an argument for a short-term turnaround at this point.

Why it matters.

A more balanced market creates opportunities for well-prepared buyers and positions strong properties to stand out. Land-use changes and housing reforms continue to create long-term opportunities, but selectivity is advised for buyers and investors. We believe opportunities are forthcoming.

What we are watching.

We continue to look most closely at inventory numbers. Unless we have an uptick in purchasing, which we think will be challenging with rates where they are, inventory will steer the pricing ship. Based on ATTOM stats, YOY pre-foreclosure numbers are up 21% nationwide. Unfortunately, we expect that trend to continue and to see more of that locally.

Scott Weitz
President | Broker, Weitz Commercial
206.306.4034 | scott@weitzcommercial.com

Trusted Advisors. Local Knowledge. Lasting Relationships.

Weitz Commercial is a full-service commercial real estate firm focused on helping clients navigate opportunities and solve problems.

WEITZCOMMERCIAL.COM
© 2026 Weitz Commercial Real Estate Services, LLC.

Fed Rate raise - What does it mean for Snohomish County Real Estate?

September 16, 2026

The Federal Reserve raised its benchmark interest rate by 0.25 percentage points today, bringing the federal-funds target range to 3.75%–4.00%. The decision was unanimous and represents the Fed’s first rate increase since 2023.

More important than the increase itself, the Fed signaled that interest rates may remain elevated and could move higher before policymakers are comfortable that inflation is returning to the 2% target.

Why the Fed Raised Rates

The Federal Open Market Committee described the economy as surprisingly resilient. Consumer spending remains healthy, capital investment is strong, unemployment has changed little, and economic activity continues to expand at a solid pace.

That resilience gives the Fed room to focus on inflation, which remains stubbornly above its target. In explaining the increase, the Fed stated that the action was intended to produce a more timely return to 2% inflation. The vote was 12–0.

Energy prices and geopolitical uncertainty have added to the inflation concern. Rather than treating those pressures as entirely temporary, the Fed appears determined to prevent them from becoming embedded in broader prices and inflation expectations.

Another Increase May Be Coming

The Fed’s updated projections point to a year-end federal-funds rate of approximately 4.1%, suggesting one additional quarter-point increase before the end of 2026. Sixteen of the 18 participating policymakers projected at least one more increase.

The median projection also keeps the rate near 4.1% through the end of 2027. That is a meaningful shift from the June projection, when policymakers anticipated a year-end 2026 rate of approximately 3.8% and a 2027 rate of 3.6%.

In other words, this was not merely a one-time adjustment. The Fed is telling markets that borrowing costs may remain higher for longer than previously expected.

The Economic Forecast

The Fed’s projections describe an economy that continues growing despite elevated interest rates:

• 2026 GDP growth: 2.3%
• 2026 unemployment: 4.1%
• 2026 PCE inflation: 3.7%
• 2026 core PCE inflation: 3.4%
• Projected year-end federal-funds rate: 4.1%

The basic message is that inflation remains too high, but the economy and employment market appear strong enough to absorb additional monetary tightening.

What This Means for Commercial Real Estate

For commercial real estate, today’s decision is another setback for borrowers waiting for materially cheaper financing.

The Fed does not directly determine commercial mortgage rates. Those rates are influenced by Treasury yields, lender spreads, property risk, and loan structure. Nevertheless, a higher policy rate — and the expectation that it will stay elevated — affects nearly every part of the lending market.

Borrowers should anticipate:

• Continued pressure on floating-rate loans;
• More difficult refinancing for loans originated at lower rates;
• Conservative lender underwriting and debt-service coverage requirements;
• Additional pressure on property values where capitalization rates have not fully adjusted;
• Wider gaps between buyers’ and sellers’ pricing expectations; and
• More opportunities involving loan maturities, distressed ownership, and recapitalizations.

Long-term borrowing costs remain particularly important. Following today’s announcement, the 10-year Treasury yield was still near 5%. That means even if the Fed pauses after one more increase, commercial mortgage rates are unlikely to fall quickly unless longer-term Treasury yields also decline.

The Snohomish County Perspective

Snohomish County’s underlying growth, industrial base, and relative affordability remain positives. However, local properties are not insulated from national credit conditions.

Owners with strong occupancy, manageable leverage, and fixed-rate debt should generally be able to weather this environment. The greatest vulnerability will likely be among owners facing near-term maturities, significant vacancies, unfinished capital projects, or loans underwritten when borrowing costs were substantially lower.

At the same time, tighter credit conditions may create opportunities for disciplined buyers. Properties that remain fundamentally sound but have an overleveraged ownership structure or an approaching loan maturity could become attractive acquisition or recapitalization candidates.

Owner-user transactions may also remain active, particularly where SBA financing and the long-term benefit of controlling a business location outweigh the immediate interest-rate cost.

Our Take

Today’s increase is not catastrophic, but it is clearly unfavorable for commercial real estate in the near term. The more significant development is the Fed’s projection that rates may remain around current levels through 2027.

The market has spent several years expecting meaningful rate relief just over the horizon. Today’s announcement challenges that assumption. Buyers should underwrite conservatively, owners should examine upcoming maturities early, and investors should avoid basing an acquisition on the expectation that inexpensive debt will soon return.

And now comes my rant: THIS. IS. INSANITY. According to the Fed, “economic activity is expanding at a ‘solid pace’. While uncertainty remains elevated, in part to geopolitical developments, domestic spending remains resilient.” Let me sum this up for you, and this is not meant to be political whatsoever….frankly, we try to remain as neutral as possible but will call out ANY policymaker that we believe is acting against the best interest of this Country and therefore our community….. THE IRAN WAR is the “GEOPOLITICAL DEVELOPMENT” leading to higher energy costs…. this is not inflation based on demand…it’s based on artificial crap fully within the control of our Government. The sad reality is anyone with half a brain who keeps an eye on the real estate markets sees 1) the market softening; and 2) inventory increasing with not enough buyers to absorb. Simply put, our Fed Chair Kevin Warsh (who happened to receive $100M upon signing on as Fed Chair from an undisclosed source (see congressional testimony)) is either a complete idiot or trying to deflate the market. Perhaps that’s the goal, but to hide behind artificial inflation is infuriating as an outsider.

For more information on Everett commercial real estate, consider contacting a Snohomish-based commercial real estate broker.

For brokerage, leasing, and investment support across Snohomish and King County, visit www.weitzcommercial.com or email Scott@weitzcommercial.com / Nathan@weitzcommercial.com.

Regards, 

Scott Weitz

T: 206.306.4034

Scott@Weitzcommercial.com 

Trusted Advisors. Local Knowledge. Lasting Relationships. Weitz Commercial is a full-service commercial real estate firm focused on helping clients navigate opportunities and solve problems.

WEITZCOMMERCIAL.COM | © 2026 .

Mill Creek's Annexation Crossroads

Weitz Commercial | Market Insight

Mill Creek's Annexation Crossroads: Four Scenarios, One Big Decision

What four annexation scenarios could mean for Mill Creek's tax base, its commercial corridors, and the property owners watching from the sidelines.

The Mill Creek City Council reached a pivotal moment on annexation at its July meeting, reviewing four expansion scenarios and signaling a direction without locking anything in. Consultants Rob Fenty (1961 Consulting) and Sarah Emmans (SME Consulting) led the presentation, while City Manager Moto framed the study as a chance to strengthen the city's financial footing.

The Big Picture

The consulting team split Mill Creek's growth area into five blocks and modeled each one's costs and revenue through 2044. The headline finding: single-family residential areas cost the city more than they generate, while commercial and industrial corridors pay their own way.

That's a dynamic we see across Snohomish County: commercial and industrial development tends to carry more than its share of the municipal tax load, subsidizing the residential services around it. It's one more reason we watch annexation and zoning decisions closely for clients evaluating Snohomish County commercial real estate.

Council set three tests for any scenario:

• Real financial impact within about three years
• Infrastructure that meets Mill Creek's standards
• Lasting city influence over what happens next

The Four Scenarios

1. Mill Creek East (Blocks A + B)
About 10,700 residents, mostly built-out and residential. Nets roughly $1.1M in year one but declines to around $500K by year 18 as a tax credit expires. Low-risk and familiar, but adds no commercial base, and part of Block B may not clear the Boundary Review Board.

2. Mill Creek South (Blocks C, D, H)
About 11,700 residents along Highway 527. The strongest financial performer, roughly $2.7M net in year one, rising to about $5.3M by year 18, but it includes neighborhoods likely to resist annexation and unresolved questions around Mays Pond, North Creek Park, and a sliver in the Northshore School District.

3. A + D + H
About 15,000 residents, following the power lines south. Financially in the middle, but seen by some on Council as costing more in process than it saves. Mayor Pro Tem Duque favored starting with Blocks A and B first.

4. All Five Blocks
About 22,400 residents, staged over several years. This option delivers the largest return, roughly $3.8M growing to $5.9M, and is the only one that meaningfully boosts the city's bonding capacity. But Council Member Cavaleri warned it could trigger state growth mandates that force more apartments into blocks the city wants kept commercial, a tension worth watching for anyone tracking Mill Creek's commercial zoning.

Pushback and Where Things Stand

Council Member Steckler challenged cost estimates tied to Block A as hard to trace; Fenty responded that staffing projections were modeled on Mill Creek's own employee ratios and will be refined later. Emmans also revised Block H's population estimate upward, from about 1,000 to roughly 2,600, after finding more multifamily housing than originally expected.

Steckler favored Blocks D and H alone as the cleanest financial play. Cavaleri argued Block C is likely needed for Boundary Review Board approval, and Mayor Vignal agreed that C, D, and H would be her pick if a third block is added. Council Member Paddock raised the question no one else had: what's the exit plan if the city announces intent to annex and later decides against it?

What's Next

No final decision has been made. Staff will build a staging plan for the favored scenario, and early talks with the Boundary Review Board will begin in parallel. A go/no-go decision is expected in the coming months.

Our Take

Annexation studies like this one are worth watching well beyond city limits. The blocks under discussion sit along growth corridors that matter for retail, industrial, and multifamily positioning throughout south Snohomish County, and how Mill Creek stages this decision will shape zoning, infrastructure investment, and commercial demand in the area for years to come. Owners and investors with property near these blocks should be paying attention now, not once a staging plan is finalized. 

For more on Snohomish County commercial real estate, please reach out to us at Scott@weitzcommercial.com or Nathan@weitzcommercial.com.

---

This post is for general informational purposes and is not legal or investment advice. Annexation scenarios, boundaries, and financial projections are subject to change as the City Council's review continues. Confirm current details with the City of Mill Creek before making decisions about a specific property.

Scott Weitz President | Broker Weitz Commercial 2716 Colby Ave Everett, WA 98201  206.306.4034 scott@weitzcommercial.com

Trusted Advisors. Local Knowledge. Lasting Relationships.
Weitz Commercial is a full-service commercial real estate firm focused on helping clients navigate opportunities and solve problems.

Everett Unenforced Masonry Overview

Weitz Commercial | Market Insight

The Rules Nobody's Enforcing: Unreinforced Masonry in Everett

What commercial and multifamily owners in Snohomish County should know about brick buildings, earthquake risk, and a regulatory gap that hasn't closed yet.

Walk down Colby Avenue, Hewitt, or Rucker in downtown Everett and you're surrounded by the city's most character-rich buildings century-old brick storefronts and mixed-use blocks that give the core its identity. Many of those same buildings are also classified as unreinforced masonry (URM): load-bearing brick or block walls built without the steel reinforcement and wall-to-floor/roof connections that modern code requires to keep a building standing in an earthquake.

Here's the part most owners don't realize: in Everett, and across most of Washington outside Seattle, retrofitting those buildings is not mandatory. The rules exist on paper. They're rarely triggered in practice.

What counts as a URM building

A typical URM is a brick, hollow clay tile, or unreinforced concrete-block building, generally constructed before the 1940s, with at least one load-bearing wall that lacks steel reinforcement. Without retrofitting, these walls, and especially unbraced parapets, are prone to cracking, partial collapse, or falling debris during ground shaking. Given the Pacific Northwest's Cascadia earthquake exposure, that's not a theoretical risk.

Everett has already counted the buildings

This isn't a guess. In 2023, the Washington Emergency Management Division, the Department of Archaeology & Historic Preservation (DAHP), and the Downtown Everett Association trained volunteers to conduct a sidewalk survey of the city's building stock. The pilot project identified more than 120 buildings in Everett showing URM characteristics, a notable inventory for a single pilot effort. The intent behind the survey was to eventually prioritize retrofit funding and risk mitigation, and DAHP has since received federal disaster-mitigation grant funding to build out a statewide URM data portal.

In other words: the city and state know where the risk sits. Knowing isn't the same as requiring anything be done about it.

Why the requirements go unenforced

Washington's Existing Building Code includes an appendix (Appendix A) with detailed seismic retrofit standards specifically for unreinforced masonry bearing-wall buildings, bracing parapets, strengthening roof and floor connections to walls, and repairing deteriorated mortar joints. It's a real, detailed technical standard. The catch is how it gets applied:

• It's largely permit-triggered, not proactive. A URM retrofit typically only becomes a requirement when an owner pulls a permit for a "substantial alteration" — a major remodel, change of occupancy, or similar. Left alone, a building can sit unretrofitted indefinitely.
• There's no Everett-specific mandatory ordinance. Seattle is the notable exception in the state, it has spent several years building toward a mandatory URM retrofit ordinance (with compliance currently voluntary while the city develops supportive funding and code recognition for completed retrofits). No comparable mandatory ordinance exists in Everett.
• Local code enforcement is complaint-driven. Everett's Code Enforcement Unit responds to reported violations, nuisance, zoning, dangerous-building complaints, rather than conducting proactive structural sweeps of older masonry stock. Absent a complaint or a permit application, a URM building's status simply doesn't come up.

Why this matters for owners and investors

For anyone holding, buying, or lending against older brick buildings in Everett's core (commercial or multifamily), this gap cuts both ways:

• No immediate compliance deadline means no forced capital expense today, which keeps basis and returns intact for buildings that would otherwise carry heavy retrofit costs.
• But the risk doesn't disappear: it shifts to insurance underwriting, tenant safety liability, and disclosure obligations at sale. Lenders and insurers are increasingly asking about seismic risk directly, URM ordinance or not.
• Seattle's trajectory is a preview. Cities that survey their URM stock tend to eventually regulate it. If Everett follows that same path, buildings identified today become tomorrow's mandatory retrofit list and early movers who retrofit voluntarily may have more flexibility on cost, timeline, and financing than owners who wait for a deadline.
• Due diligence should assume the code is silent. Don't rely on the absence of a violation notice as evidence a masonry building is structurally sound. A pre-purchase structural assessment from a licensed engineer is the only way to actually know what you're buying.

Scott's take

We're seeing more capital interested in downtown Everett's older brick buildings — adaptive reuse is one of the categories we flagged as improving in this month's Opportunity Index. That's a good thing for the core. But "no mandatory retrofit ordinance" isn't the same as "no risk." Owners of URM buildings should treat a structural evaluation the same way they'd treat a Phase I environmental report: a standard piece of diligence, not an optional one. The regulatory gap will close eventually. Buildings that get ahead of it will be worth more when it does. For more information on Snohomish County Commercial Real Estate, please email us at Scott@Weitzcommercial or Nathan@weitzcommercial.com.

---

This post is for general informational purposes and is not legal, engineering, or compliance advice. Building code requirements change and can vary by permit type and project scope. Before making decisions about a specific property, confirm current requirements with the City of Everett Permit Services and consult a licensed structural engineer.

Scott Weitz President | Broker Weitz Commercial 206.306.4034 scott@weitzcommercial.com

Trusted Advisors. Local Knowledge. Lasting Relationships.
Weitz Commercial is a full-service commercial real estate firm focused on helping clients navigate opportunities and solve problems.
WEITZCOMMERCIAL.COM  |  © 2026 Weitz Commercial Real Estate Services, LLC.

Weitz Commercial Market Watch August 2026

MARKET WATCH

SNOHOMISH COUNTY MARKET UPDATE

August 2026 — Local Perspective. Real Insight. Real Value.

THE 9 THINGS WE'RE WATCHING

1. Residential Active Listings (YoY)

Inventory continues to build compared to last year, giving buyers more options and creating a more balanced market.

2,310 (July 2026)  vs  1,731 (July 2025)

+33.4% YoY change

2. New Listings (YoY)

More sellers are entering the market compared to this time last year, adding to available inventory.

1,303 (July 2026)  vs  1,106 (July 2025)

+17.8% YoY change

3. Months of Inventory (YoY)

Months of inventory shows how long it would take to sell all active listings at the current sales pace.

2.9 (July 2026)  vs  2.2 (July 2025)

+0.7 YoY change

A balanced market is typically 4–6 months of inventory.

4. Median Sale Price (YoY)

Median sale price has softened slightly compared to last year, reflecting higher rates and increased inventory.

$757,250 (July 2026)  vs  $805,000 (July 2025)

-5.9% YoY change

5. Mortgage Rates (YoY)

Higher mortgage rates continue to impact affordability and buyer demand.

6.65% (July 2026)  vs  6.82% (July 2025)

Monthly Payment on Median Price Home ($710,000 with 20% down)

$3,889 July 2026

$4,104 July 2025

+$215 more per month

6. Notable Commercial Transactions

Ivar's Mukilteo

• Sale price: $10,000,000
• Price per SF: $1,038
• Address: 710 Front St, Mukilteo, WA 98275
• Purchased by the City of Everett

7. Legal & Government Watch

Everett Stadium Update

• City of Everett continues purchase of property for Aquasox stadium
• 11 of 17 properties purchased
• Total acquisition costs currently at $17.3 million

We monitor the issues that impact property values, development and investment.

8. Opportunity Index

IMPROVING Development Land Small Multifamily Industrial Owner-User Adaptive Reuse

STABLE Neighborhood Retail Medical Office Self-Storage

CHALLENGING Commodity Office Older Class C Retail

9. Scott's Perspective

Market thoughts.
Price compression and inventory increases are driving the market. Inventory is up to 2,310 from 1,731 last year — a notable 33% increase.

Why it matters.
Until further notice, listing inventory will dictate our stance on the residential market. If that number continues to increase, further price compression seems inevitable. If rates go down and/or inventory decreases, the market could shift, but otherwise, we expect more of the same.

What we are watching.
The commercial market typically performs separately from the residential market, but we're seeing more listings in Snohomish Commercial as well. The same principles will apply in Commercial — inventory will steer the ship.

---

Scott Weitz President | Broker Weitz Commercial 425.275.9562 scott@weitzcommercial.com

Trusted Advisors. Local Knowledge. Lasting Relationships.
Weitz Commercial is a full-service commercial real estate firm focused on helping clients navigate opportunities and solve problems.
WEITZCOMMERCIAL.COM  |  © 2026 Weitz Commercial Real Estate Services, LLC.

CNBC National Update - June 2026

 

Above is a CNBC market update for Residential real estate. 

The highlights (or lowlights I suppose): 

Pending Home sales down 5.3% from May to June. 

Homebuilder sentiment stays low at a '34' (50 being a neutral figure). 

Our take: 

Nothing surprising here if you read our blog routinely. The data moving forward is going to be extremely important in guiding future outlook. Does inventory continue to increase? Does the Fed finally start to make rate cuts to help buyers and free up those 'stuck' in low-rate loans? Does the war in Iran continue putting a strain on energy prices globally? 

For years, I've tried to brutally honest on this blog whether right or wrong. I continue to believe this is the start of a long challenging stretch for the US economy and specifically the real estate market. Inventory will be the single leading most important indicator over the next 12-24 months. Even if rates were to increase, increasing inventory will dictate the supply/ demand equation and truly dictate where the market goes from here. 

Our Firm

Weitz Commercial

Scott@Weitzcommercial.com

T: 206.306.4034. 

Is Distress Quietly Returning to the Snohomish County Real Estate Market?

Why today's market feels different—and what property owners and investors should be watching.

If you've followed the real estate market over the past few years, you've probably noticed that the conversation has changed.

Just a few years ago, the biggest challenge was finding inventory. Properties sold within days, multiple offers were common, and buyers routinely waived contingencies just to compete.

Today, the market tells a different story.

Inventory has increased. Buyers have become more selective. Interest rates remain significantly higher than they were during the pandemic, and properties are taking longer to sell. While the Snohomish County market remains fundamentally healthy, subtle signs of financial pressure are beginning to emerge.

The question isn't whether the market is collapsing—it isn't. The better question is whether distress is quietly returning to portions of the market.

This Isn't 2008

Let's start with the good news.

Today's market is dramatically different from the conditions that led to the Great Recession.

Most homeowners purchased or refinanced into historically low fixed-rate mortgages between 2020 and 2022. Lending standards have generally been much stronger over the past decade, and many homeowners still have substantial equity in their properties.

That equity provides options.

Rather than facing foreclosure, many owners experiencing financial difficulty can sell their property, pay off existing debt, and preserve a meaningful portion of their investment.

That's one of the biggest reasons foreclosure activity remains well below the levels seen during the housing crisis.

Where Financial Pressure Is Building

While residential homeowners remain in a relatively strong position overall, other parts of the market are experiencing greater stress.

Commercial property owners who financed acquisitions during periods of historically low interest rates are beginning to face loan maturities.

Many are discovering that refinancing at today's rates dramatically increases their monthly debt service.

At the same time, operating costs continue to rise.

Owners are facing increases in:

• Property insurance

• Property taxes

• Maintenance costs

• Labor expenses

• Construction costs

• Interest expense

For some properties, rental income has not increased enough to offset these higher operating costs.

That doesn't necessarily mean foreclosure is imminent—but it does mean more owners are evaluating whether selling, refinancing, or restructuring their investments makes sense.

Watch for These Early Indicators

Markets rarely change overnight.

Instead, they tend to shift gradually before headlines catch up.

Some indicators worth watching include:

• Properties remaining on the market longer than expected

• More price reductions before a sale

• Increased seller concessions

• Higher inventory levels

• More bridge financing and private lending

• Loan maturity extensions

• Increased notices of default and trustee sales

Individually, none of these signals indicate a distressed market.

Together, however, they suggest a market that is becoming more balanced—and one where negotiation has returned.

Opportunities Often Begin Quietly

Periods like this often create opportunities for well-prepared investors.

Owners facing refinancing challenges may become more willing to negotiate.

Developers may discover landowners who are more receptive to partnership opportunities.

Commercial investors may identify assets that simply require fresh capital or a different ownership structure—not necessarily properties with fundamental flaws.

These opportunities rarely appear after newspaper headlines announce a market correction.

They often develop months earlier.

Why Snohomish County Is Different

Snohomish County continues to benefit from several long-term fundamentals that support real estate values.

Population growth continues to drive housing demand.

Infrastructure investments—including future Link light rail expansion—are expected to improve regional connectivity over the coming years.

Communities such as Everett, Marysville, Arlington, and Lake Stevens continue to experience residential and commercial growth, while Washington's recent housing legislation has expanded redevelopment opportunities for many properties.

Those factors provide a much stronger foundation than existed before the last major housing downturn.

What Property Owners Should Be Doing Today

Whether you own a home, an investment property, or commercial real estate, now is a good time to review your position.

Consider asking yourself:

• When does my financing mature?

• How would today's interest rates affect a refinance?

• Has my property's redevelopment potential changed under Washington's recent housing laws?

• Is my property being used to its highest and best use?

• Would holding, improving, or selling create the greatest long-term value?

For many owners, simply understanding these questions can reveal opportunities that didn't exist just a few years ago.

The Bottom Line

The Snohomish County real estate market isn't showing signs of a broad collapse.

What it is showing is a gradual return to a more traditional market—one where careful underwriting, thoughtful negotiation, and local expertise matter again.

For buyers, that may create opportunities that have been scarce for several years.

For sellers and property owners, it is an excellent time to understand how changing financing conditions, zoning laws, and market trends could affect the value of your property.

The next chapter of the market is unlikely to be defined by panic. More likely, it will be defined by preparation—and by recognizing opportunities before everyone else does.

---

About Weitz Commercial

At Weitz Commercial, we help property owners, developers, and investors throughout Snohomish County navigate changing market conditions with practical legal and commercial real estate insight. Whether you're evaluating a sale, exploring redevelopment potential, or looking for investment opportunities, our goal is to help you make informed decisions backed by local market knowledge.

Visit www.weitzcommercial.com to learn more or contact us to discuss your property.

How the ROAD to Housing Act Could Change Financing for Modular Housing Developers

 

The demand for housing continues to outpace supply across Washington State, and developers are increasingly looking toward modular construction as a faster, more efficient way to deliver new homes. While modular construction has long offered advantages in speed, quality control, and reduced labor costs, financing these projects has remained one of the industry's biggest hurdles.

The recently enacted 21st Century ROAD to Housing Act takes an important step toward addressing that problem by directing the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) to modernize how modular housing projects are financed.

Although the legislation does not immediately create a new loan program, it begins what could become one of the most significant federal updates to modular housing finance in decades.

Why Financing Has Been Difficult

Traditional construction lending was designed around site-built homes.

A conventional lender typically advances funds as work is completed on-site and verified through inspections. Modular construction, however, follows a very different process.

A large portion of construction costs are incurred before the modules ever arrive at the project site. Developers often must pay significant factory deposits, purchase materials, fund manufacturing, and arrange transportation before they receive many of the construction loan advances available under traditional lending models.

This mismatch has forced many modular developers to rely on additional equity, private financing, or expensive bridge capital simply to keep projects moving.

What the ROAD to Housing Act Changes

Recognizing these challenges, Congress directed HUD to review every aspect of FHA construction lending that may unnecessarily disadvantage modular housing.

Among the issues HUD has been instructed to evaluate are:

• Construction loan underwriting

• Inspection procedures

• Construction draw schedules

• Administrative requirements

• Other financing barriers unique to modular construction

Rather than assuming modular homes should fit within traditional construction lending rules, Congress has acknowledged that factory-built housing follows an entirely different production process.

A Potential Game Changer: Construction Draw Schedules

Perhaps the most important provision concerns construction draws.

Under current lending practices, loan proceeds are often released only after construction milestones are completed on-site.

For modular projects, however, much of the value is created inside the manufacturing facility long before installation occurs.

The Act directs HUD to evaluate alternative draw schedules that could better reflect factory production milestones instead of only on-site inspections.

If ultimately adopted through HUD rulemaking, lenders may be able to release funds earlier during production, improving project cash flow and reducing financing costs.

For many developers, this could become one of the most meaningful financial improvements resulting from the legislation.

Increased Confidence for Lenders

The legislation also encourages HUD to examine ways to improve documentation and standardization for modular construction.

Today, manufacturers often use different documentation systems, making collateral review and underwriting more complicated than for traditional construction.

Standardized documentation and identification systems could make it easier for lenders to:

• Verify collateral

• Evaluate projects consistently

• Reduce underwriting uncertainty

• Improve secondary market confidence

These changes have the potential to encourage greater participation by banks and institutional lenders that have historically been cautious about financing modular projects.

What the Law Does Not Do

It is equally important to understand what the legislation does not accomplish—at least not immediately.

The Act does not:

• Create a new FHA modular loan program

• Reduce down payment requirements

• Guarantee construction loans

• Provide new federal tax credits

• Require banks to finance modular developments

Instead, Congress has instructed HUD to study existing barriers and begin the federal rulemaking process to modernize FHA construction lending.

Those future regulations—not the statute itself—will ultimately determine how much financing improves for modular developers.

Why This Matters in Washington State

Washington continues to experience significant housing shortages, particularly in rapidly growing communities throughout Snohomish County and the Puget Sound region.

At the same time, recent state legislation has expanded opportunities for middle housing, multifamily development, and increased residential density in many jurisdictions.

As developers search for ways to deliver housing more efficiently, modular construction is becoming an increasingly attractive option.

If financing evolves alongside construction technology, modular housing could become an even more competitive solution for workforce housing, apartments, townhomes, and mixed-use developments.

Looking Ahead

The passage of the ROAD to Housing Act represents more than a policy discussion—it signals a growing recognition at the federal level that financing systems should evolve alongside modern construction methods.

Over the coming months, developers, lenders, manufacturers, and investors should closely monitor HUD's rulemaking process. If meaningful reforms are adopted, modular housing projects may become easier to finance, less capital intensive, and more attractive to a broader range of lenders.

For developers evaluating opportunities in Snohomish County and throughout Washington, these changes could help unlock projects that previously struggled to secure efficient construction financing.

---

At Weitz Commercial, we closely monitor changes in real estate law, land use regulations, and financing trends that impact property owners, developers, and investors throughout Snohomish County. If you're considering a modular housing project or want to understand how evolving financing rules may affect your property, we'd be happy to discuss your project and the opportunities these changes may present.

Learn more at www.weitzcommercial.com.

Road to Housing Act Overview: How does it effect Snohomish County?

The commercial real estate market has spent the past several years navigating higher interest rates, elevated construction costs, and tighter lending standards. While those challenges remain, Congress has enacted the 21st Century ROAD to Housing Act, the first major federal housing package in decades. The legislation is designed to increase housing supply by reducing development barriers, modernizing federal housing programs, and encouraging additional residential construction.

Although much of the national conversation has focused on affordability, the bigger story for investors may be the opportunities this creates in Snohomish County Real Estate.

The law alone will not solve America’s housing shortage, but it represents a significant policy shift toward increasing housing production rather than simply subsidizing demand.

Why Housing Supply Matters

For years, economists have pointed to one simple reality: the United States has not built enough homes to keep pace with population growth.

The result has been:

• Higher home prices
• Rising rents
• Lower affordability
• Increased competition for existing housing

Rather than focusing primarily on buyer incentives, the ROAD to Housing Act attempts to increase the number of homes being built through a series of targeted reforms.

Over the course of the week, we will examine the major issues of this bill in detail, but below is an overview of the law as an initial introduction.

1. Faster Environmental Reviews and Permitting

One of the bill’s most significant reforms streamlines portions of the federal environmental review process for qualifying housing developments.

Anyone who has developed commercial or residential property understands that time is expensive.

Every additional month can increase:

• Interest carry
• Construction costs
• Insurance expenses
• Labor costs
• Material inflation

Reducing unnecessary delays can improve project feasibility and encourage developers to move forward with projects that might otherwise remain on the sidelines.

2. Funding to Help Local Governments Approve More Housing

The legislation also provides new resources for state, local, and tribal governments to improve housing production.

Funding may be used for:

• Modernizing permitting systems
• Updating planning departments
• Housing production initiatives
• Infrastructure planning
• Digital permit processing

Many development delays occur because planning departments simply lack sufficient staffing or technology. Improving these systems can shorten approval timelines without reducing public oversight.

3. Expanded Support for Modular and Manufactured Housing

Another important provision encourages alternative construction methods.

The legislation supports modernization of manufactured housing and recognizes modular and prefabricated construction as an important part of addressing the housing shortage.

For investors following Snohomish County Real Estate, this could become increasingly important.

Off-site construction can potentially reduce:

• Construction timelines
• Labor shortages
• Weather delays
• Financing costs

As construction costs continue rising throughout Western Washington, modular multifamily projects may become an increasingly attractive option.

4. Modernizing Federal Housing Programs

The Act updates numerous HUD housing and community development programs that many practitioners viewed as outdated.

These changes are intended to make financing and housing assistance programs more efficient while encouraging additional housing production.

5. Assistance for Local Housing Planning

The legislation recognizes that many communities want additional housing but lack the resources necessary to update zoning, complete infrastructure studies, or modernize comprehensive plans.

Federal support is intended to help communities better prepare for future growth.

6. Encouraging Accessory Dwelling Units (ADUs)

The bill expands financing opportunities for certain accessory dwelling units through federal housing programs.

While ADUs alone will not eliminate the housing shortage, they can provide meaningful “missing middle” housing in established neighborhoods and increase overall housing inventory over time.

7. Improving Access to Small-Dollar Mortgages

The legislation creates pilot programs designed to improve financing for lower-priced homes through small-dollar mortgage programs.

These initiatives are intended to help buyers access housing that traditional lending programs often overlook.

8. Restrictions on Large Institutional Investors

One of the most publicized portions of the Act places new limits on future acquisitions of single-family homes by very large institutional investors, while preserving certain exceptions such as some build-to-rent activity. Supporters argue this could improve opportunities for individual homebuyers to compete for existing housing.

While these federal reforms are significant, the biggest determinants of future housing production in Snohomish County remain local.

The federal law does not override:

• Local zoning ordinances
• Washington’s SEPA requirements
• Critical area regulations
• Shoreline rules
• Utility capacity limitations
• Local design review

Instead, the legislation provides tools and incentives that local governments can use to accelerate housing production if they choose.

For communities such as Everett, Marysville, Arlington, Lake Stevens, Monroe, and Snohomish, this creates an opportunity to pair federal reforms with ongoing comprehensive plan updates and transit-oriented development.

Our Perspective

The ROAD to Housing Act is unlikely to transform the market overnight, but it represents another signal that development opportunities throughout Snohomish County Real Estate are continuing to evolve.

For property owners, developers, and investors, now is an excellent time to evaluate whether today’s commercial property may have an even greater highest and best use tomorrow.

Rail Meets Retail: The Light Rail Effect on Snohomish County Commercial Property

Retail is having its best national moment in a decade — and in Snohomish County, the coming Everett Link Extension is about to decide exactly where that momentum lands.

Nationally, 2026 is shaping up to be retail's strongest year in a long time. Locally, Snohomish County is in the middle of rewriting its zoning code to prepare for light rail. Put those two things next to each other and you get a pretty clear preview of where commercial investment is headed next — and it's not the strip malls that got built for a car-only world.

The National Backdrop: Retail Is Back

After years of being written off, retail real estate is quietly outperforming almost every other commercial sector heading into 2026. Grocery-anchored and neighborhood shopping centers are seeing their strongest valuations in a decade, excluding regional malls, and vacancy across the sector is holding in the range of 5% — a level the industry hasn't seen in years.

The shape of that demand has changed, though. Retailers are signing smaller leases than ever: the average retail lease signed over the past year fell below 3,500 square feet for the first time since data tracking began, driven largely by restaurant and service tenants like coffee chains, fast-casual concepts, and quick-service brands. At the same time, nearly 26 million square feet of ground-floor retail has been leased in nontraditional buildings — apartments, hospitality, even office buildings — as retailers chase foot traffic wherever density is building.

That's the key word: density. Retail is thriving specifically in the places where people already are, on foot, regularly. Which is exactly what light rail is designed to create.

The Local Setup: Zoning Ahead of the Trains

Snohomish County isn't waiting for the Everett Link Extension to open before preparing the ground under it — literally. The county has spent years building a regulatory framework specifically aimed at capturing retail and mixed-use demand around future stations, well before a single train runs.

Light Rail Community (LRC) Zoning

Around the future Ash Way and Mariner stations — and potentially the provisional SR 99/Airport Road stop — the county is rezoning land currently designated Urban Center into a new Light Rail Community zone. It's built for high-density housing, office space, and street-level commercial and retail, all within about a half-mile of each station, with amenities designed to support transit-oriented development rather than car-oriented strip retail.

Mixed Use Corridor (MUC) Zoning

Just as significant for retail investors: the county is also creating a Mixed Use Corridor zone for the major commercial arterials feeding into the Urban Core Subarea — most notably SR 99 between Everett and Lynnwood, and 164th St SW. Today, those corridors look like a lot of American commercial strips: single-story buildings, strip malls, big surface parking lots, and a heavy concentration of car dealerships. The MUC designation is explicitly meant to convert that land into walkable commercial and service hubs that support the denser residential neighborhoods light rail will bring in.

In other words, the county has already identified — on a map, in a formal planning document — exactly where it expects car-oriented retail to give way to the kind of walkable, mixed-use retail that's outperforming nationally right now.

Where It's Already Happening

You don't have to wait for the Draft EIS to see this playing out. Lynnwood in particular has been described as shifting from "suburb with good shopping" to something closer to an emerging urban hub, with a wave of new multifamily projects clustering in and around Lynnwood City Center and Alderwood Mall. The county is investing directly in the infrastructure to support it, funding corridor improvements along Alderwood Mall Parkway, and large master-planned projects like District 425 are moving forward in the same footprint.

None of this is a coincidence. It's the built environment catching up to a transit line that's still over a decade from opening in full.

What This Means for Investors and Owners

A few takeaways worth sitting with if you own, lease, or are evaluating Snohomish commercial real estate right now:

• Location relative to future stations matters more than current zoning. A property sitting inside the future LRC or MUC boundaries today may look like an ordinary strip retail site, but it's sitting on land the county has already earmarked for significantly higher-value use.
• Smaller footprints are an advantage, not a limitation. National retailers are already gravitating toward sub-3,500-square-foot spaces — a profile that fits naturally into the walkable, mixed-use formats the county is planning for around station areas.
• The window to reposition is now, not after the ribbon-cutting. By the time the first phase of Link service reaches South Everett in 2037, the properties best positioned to capture new foot traffic will likely already be under new ownership, redeveloped, or repositioned. Waiting for construction to finish means competing with everyone else for the same sites.
• Deferred parking near stations changes site selection. Sound Transit's decision to defer parking garages at the Mariner and Everett stations means nearby existing parking and access will carry outsized value for a while — a detail worth factoring into any acquisition near those two stops specifically.

For anyone actively tracking commercial real estate opportunities in Snohomish County, the SR 99 and 164th St SW corridors, along with the areas immediately around Ash Way and Mariner, are worth watching closely as the county finalizes its Light Rail Community and Mixed Use Corridor zoning over the next year.

The Bottom Line

Retail's national comeback and Snohomish County's light rail buildout are, in a real sense, the same story told at two different scales. Nationally, capital is chasing foot traffic and density. Locally, the county has drawn the boundaries for exactly where that density is going to show up next. The Everett Link Extension won't reach downtown Everett until 2041 — but the commercial real estate map for the corridor is already being redrawn.

Sources: CoStar/CNBC, Cushman & Wakefield, Sound Transit, Snohomish County Planning and Development Services, Lynnwood Times. Local market insight and Snohomish commercial real estate guidance courtesy of Weitz Commercial. Project and zoning details current as of July 2026 and subject to change as planning processes continue.