Bentall Capital U.S. began construction this week on a long-delayed 15-story office tower in downtown Bellevue, supplying one more signal that the Eastside city's office market continues to sizzle.
Bentall Capital U.S. began construction this week on a long-delayed 15-story office tower in downtown Bellevue, supplying one more signal that the Eastside city’s office market continues to sizzle.
Bentall first announced plans for the 340,000-square-foot Summit III project, at Northeast Fourth Street and 108th Avenue Northeast, in 2005.
It backed off then because the market was cooler, and because some tenants in the older, smaller office building on the site wouldn’t agree to terminate their leases early.
Now, “market conditions look very favorable,” said John Jackson, Bentall’s vice president for development.
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“Given all the recent leasing activity in downtown Bellevue, the owners felt a lot more comfortable going forward with construction now than they did a couple months ago.”
Four new office towers are scheduled for completion in downtown Bellevue over the next year.
Three are almost entirely pre-leased, to Microsoft and Expedia, and Microsoft is rumored to be negotiating to rent almost all the space in the fourth.
Summit III will replace the 68,000-square-foot Summit Ridge building, constructed in 1970. Its last tenant moved out several months ago, Jackson said.
The new tower, which will include seven floors of underground parking, is scheduled to be finished in December 2009.
While Bentall so far has signed no tenants, “their timing looks to be very good,” said Oscar Oliveira, senior vice president in the Bellevue office of brokerage Colliers International.
The office vacancy rate in downtown Bellevue is just 5.7 percent, he said, and if all four buildings now under construction are filled, as seems likely, Summit III will be the first significant new space to come on the market after them.
That means it could command the highest rents, Oliveira said.
Jackson said Summit III’s architecture will be similar to that of the neighboring 13-story PSE Building and 11-story PSE East Building, built by Bentall in 2002 and 2005, respectively.
All three buildings are owned by SITQ, a Montreal real-estate investment firm controlled by several Canadian pension funds.
Eric Pryne: 206-464-2231 or email@example.com