After a year of watching Eastside companies gobble up office space, the Seattle area's biggest landlord has decided to take a risk by building...

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After a year of watching Eastside companies gobble up office space, the Seattle area’s biggest landlord has decided to take a risk by building a 26-story skyscraper even though it doesn’t know who will lease it.

Chicago-based Equity Office, a publicly traded giant that owns more than a third of downtown Bellevue’s office space, announced Thursday that it would start construction in mid-2006 on a second tower in its City Center complex at 110th Avenue Northeast and Northeast Sixth Street.

The 559,000-square-foot building would be ready to open in early 2008, making this essentially a bet that the region’s economy has at least two or three years of growth left in it.

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The Equity board gave the project the go-ahead earlier this week, said the company’s top local executive, Pat Callahan.

“Bellevue’s one of the healthiest markets in the country,” Callahan said. “Job growth is strong now, and we expect it to continue. It’s time to build a new building.”

Breaking ground without a known tenant, known as building “on spec,” is common among builders of single-family homes but not among developers of $200 million office buildings.

Equity’s last spec building also was a Bellevue tower: Key Center on 108th Avenue Northeast started in the late 1990s in the midst of the tech boom.

Normally, developers like to have signed leases for 50 percent of a building before they dig, but several trends at work in Bellevue argue for being more aggressive.

• The city’s office-vacancy rate has plunged from 30 percent three years ago to around 8 percent. Large spaces in prime buildings are hard to find, and small companies are running out of room for new employees.

• In contrast to the 1990s, there are virtually no large-scale commercial-development sites left along I-90 or 520. That means growth will be channeled to downtown Bellevue, where there is still plenty of land for skyscrapers, said Tom Bohman, of commercial brokerage Cushman and Wakefield.

• The Eastside’s sharp-edged business cycles in the past rewarded early-bird office developers and severely punished latecomers.

Equity’s announcement follows a similar one from Schnitzer Northwest, which announced in October that it would start construction on an 875,000-square-foot office-retail complex called the Bravern even though it had not signed tenants. At least three other companies are planning office projects.

“The question was, who else was going to jump into the fray,” Bohman said. “Equity’s been quietly getting all the pieces in place to do this.”

Kip Spencer, of Seattle-based listing service Officespace.com, said Equity, as the area’s biggest landlord, gets the pulse of the market from its many tenants.

“There are some big-name, even some headquarters-caliber firms that are going to be looking for a home here in the near future,” Spencer said.

Companies are scouting for a total of 3 million square-feet of space in downtown Bellevue in the next 24 months, Spencer estimates. That’s either new growth or new locations when their existing leases expire, and it represents enough demand to fill the 76-story Columbia Center twice over.

A number of companies in suburban office parks are taking a closer look at downtown Bellevue when their leases expire, Spencer said.

“It’s a much different dynamic in the core, with downtown Bellevue turning into a more pedestrian-friendly, amenity-friendly neighborhood,” he said. “You don’t have to jump into your car to go to lunch.”

Tom Boyer: 206-464-2923 or tboyer@seattletimes.com