By Tracy Record
West Seattle Blog editor

This time of year, for the past several years, longtime West Seattle real-estate entrepreneur Mike Gain would have been wintering in the California desert.

Instead, one morning last week, he talked with WSB while at his desk on the fourth floor of the Jefferson Square office building, looking out where the Olympics might have been visible if not for a thick wall of clouds.

But he’s not complaining. When we last interviewed him 8 months ago, he had just returned to take over Prudential Northwest Realty, five years after selling it. Its previous owners had moved the corporate headquarters to the Eastside; in March, Gain told us he hoped to move the HQ back to West Seattle, where he and longtime business partner Roger Cayce first scored real-estate success decades earlier.

The reason we interviewed Gain again now: He says the move is finally complete, and Prudential’s 24 corporate employees are now headquartered at Jefferson Square, where the company has taken over more than 4,000 square feet on the fourth floor in addition to its 14,000+-square-foot 6th-floor offices.

In fact, he reveals during our chat, Prudential is not only the Jefferson Square office building’s biggest tenant, but has also become the building’s management/leasing agency.

That’s not the only news in our conversation – we also discussed the “upzone” proposal that’s now been before the city for 2 years for the south-of-Admiral blocks of California SW where Prudential used to have offices.

What a difference seven months can make, in many ways. One of the questions we asked Gain during our chat earlier this year was about a rumor that, with his return to Prudential NW, the company might reopen the then-recently-closed offices on California SW. His reply at the time – “just a rumor.”

And it didn’t turn into reality. In fact, since then, the office spaces on both sides of the street have taken on new tenants – “a really diverse group of businesses,” he notes – including Arcane Comics, small clothes, and Cometa Playschool, plus a business he describes as “a yarn shop with no sign – I don’t know what they do in there, but they’re always busy! The diversity of businesses (in the block) is awesome, instead of having one real estate office occupying all that space.” (2:17 pm note – A comment points out the store is Little Knits.)

Gain is not only impressed by the tenants, but also by a new neighbor in a space he doesn’t own – The Swinery. “Have you seen that place?” he asks, enthusing about the items he saw during a recent visit, including pumpkin apple soup.

Back to the “upzone” proposal for the area (past WSB coverage here), Gain says that he understands it’s close to moving to the next step in the city-approval process (we’re checking with DPD to see what we can find out). But the market has changed so dramatically, he says, even an approval will not trigger an immediate development process – he says the market wouldn’t be conducive for at least three years, maybe up to seven, but whenever that happens, they’d be looking at redeveloping the east side of the street first.

The west side of the street there includes the single-story building where Prudential NW had offices, and while Gain allows that some of Prudential NW’s agents were not entirely thrilled by moving from the ground-floor Admiral offices to the Jefferson Square office building, he says everyone stayed on. The recent corporate HQ move has meant a new commute for some administrative employees – including the relocation division and a new “bank-owned properties” division — who used to work in Prudential NW offices outside West Seattle, but he says they seem to have warmed to it too, especially considering that coming to West Seattle in the morning and leaving in the evening equals a “reverse commute,” and the fact that The Junction teems with places to walk during breaks to get food and beverages, including the new QFC across the street.

(The company maintains branch offices in areas including the Eastside and South King County, and recently added one in Kirkland, while closing one in North Seattle. Gain says he spends time in each office each week, mostly coaching/teaching.)

The business has changed for the better, according to Gain. In March, he told us he believed things had bottomed out. When it comes to residential real estate, he says, that seems to have been the correct assessment – the Northwest Multiple Listing Service reported that pending sales for September were up 27 percent from a year earlier, and according to Gain, Prudential NW has almost doubled those results, with pending sales up 50 percent year-to-year. (Another interesting statistic he offers, one he says gets little notice: Inventory – the amount of properties for sale – is down.) He says they really “turned the corner in May.” And he says it helps that the banking industry is OK with residential real estate now, though commercial, he says, hasn’t bottomed out yet – and even once things improve, “there’s so much planned/permitted that has to be built first.”

However, he maintains long-term optimism: “When we come out of this, we’re going to see a steady growth pattern, it’s not going to be insane, and you’re going to have to have your (own) money in the deals, and know what you’re doing. We have to get real again.” What development he’s been doing does indeed involve his own money – the Alki multiplex that was under construction when we spoke earlier this year is now complete, and Gain says three of the units have sold; another six-unit project is under way in Alki, on 61st: “We just put the roofs on.”

In the wider residential real-estate market, “we’re starting to see more up-buyers – if anyone can afford to buy a home today, they’re crazy not to.” Many first-time buyers are jumping in, he says, with the federal credit playing a big part in that, but unlike the boom times of risky loans, “you need good credit, and you have to have a job.” And while he says some fret about the 9 percent unemployment rate, he suggests focusing on the 91 percent employment rate.

Last month, he says, he held an all-company meeting with the theme “The Climb” – song and all – “long, steady, but uphill … but it’s a lot better to be climbing than sliding down. … (and) failure is not an option.” Perhaps one more signal of his optimism – even as he’s settling the entire corporate headquarters into extra space at Jefferson Square, he mentions the location has “room for expansion.”