Bellevue office market sizzles with 10 projects totaling more than 6M square feet

by Marc Stiles | December 7, 2018 | Puget Sound Business Journal

As Trammell Crow Co. was preparing this fall to submit plans for its Bellevue Cadillac Office Towers project, other developers also were teeing up projects in downtown Bellevue.

Public records show that Hines has obtained the construction permit for its Summit III project, and that Fana Group of Cos. had a pre-application meeting for an 18-story office project in a mixed-use development proposed three years ago.

Fana has not applied for any permits, a city Department of Development Services spokesperson said Tuesday. As of Wednesday, Fana had not responded to a Business Journal inquiry.

Vulcan Real Estate, meanwhile, has hired GLY Construction to build the three-tower Bellevue Plaza development and is eying an early 2020 construction start for the first phase, company Director of Investment Strategy Lori Mason Curran said this week.

Nine projects totaling 5.6 million square feet are under construction or working their way through the approval process. For comparison, the central business district’s total inventory is 9.7 million square feet.

This doesn’t include a 10th project by heavyweight Skanska, which has yet to submit plans for 10660 NE Eighth St., though the company has said it will build an office tower with around half a million square feet.

Tech companies in general, but Amazon.com Inc. particularly, are driving this activity. Downtown Bellevue is running out of space. During the third quarter companies signed leases totaling more than 1.5 million square feet across the Eastside, according to the Broderick Group. Based on leasing activity, the brokerage said there will be only two full floors available in all of downtown Bellevue by year’s end, when the submarket’s vacancy rate will hover around just 4.5 percent.

This spring a real estate source said Amazon would take Expedia’s current headquarters building and Summit III. The source, who has worked on Amazon deals, requested anonymity to preserve a relationship with the company.

Amazon did lease the Expedia tower, a move the company said will give it 4,500 employees in two towers by 2020. And now comes Hines with a building permit for Summit III.

“We have nothing to announce at this time,” Hines said in a statement. “Hines is actively looking for a pre-lease prior to breaking ground and commencing construction. Bellevue remains an extremely active market with lots of tenant interest.”

Amazon officials had not responded to a Business Journal’s inquiry as of Wednesday.

Commercial real estate industry sources think Amazon also will lease Vulcan’s Bellevue Plaza project, though Mason Curran said none of the space has been pre-leased.

 

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