With the area’s office-vacancy rate tightening and more tech firms scouting for space, new speculative towers are rising on both sides of Lake Washington.
This past week, local developer Schnitzer West became the third developer to break ground this year on a skyscraper in Bellevue’s central business district.
Schnitzer said it has begun construction on Centre 425, a 16-story tower scheduled to open in 2016. Located at 425 106th Ave. N.E., the tower will have about 360,000 square feet of office space, tenant workspaces and retail.
Trammell Crow, a Dallas-based developer, is building a 19-story, 462,000-square-foot office tower along 108th Avenue Northeast. And over the summer, Kemper Development broke ground on a 1.5 million-square-foot expansion of Lincoln Square, which includes 700,000 square feet of office space.
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The building frenzy in Bellevue has long been anticipated by office brokers. Downtown Bellevue’s vacancy rate for Class A space was under 7 percent in the third quarter, according to commercial real-estate brokerage JLL.
But at least one leading office broker questions how successfully the market will absorb the 1.5 million square feet of new space when it’s delivered in two years.
“In this cycle three buildings is doable, but it’s a little scary from the standpoint that Microsoft’s not likely to participate,” said Paul Sweeney, a principal at The Broderick Group, a local commercial real-estate brokerage.
Microsoft absorbed most of the new office space built in downtown Bellevue during the last cycle, he said. But this time around, he expects to see other technology firms absorb the new space.
Meanwhile, in Seattle, developers are pushing ahead with office towers that should yield at least 1 million square feet of new space next year — and that’s not counting two new buildings Vulcan pre-leased to Amazon.com. The Class A vacancy rate in downtown Seattle is about 11 percent, according to JLL.
Amid many shorter mid-rise office projects, Touchstone is constructing on the Troy block across the street from Amazon’s world headquarters. The 800,000-square-foot complex consists of two L-shaped towers, 12 and 13 stories tall. No pre-leases have been announced.
Meanwhile, Schnitzer West says it has started work on its 36-story Madison Centre tower at 505 Madison St. in the central business district. The developer says the 750,000-square-foot tower will be a “vertical corporate campus” but hasn’t signed any tenants yet.
Schnitzer’s tower, expected to open in 2016, may face competition from other planned skyscrapers, such as Fifth & Columbia Tower, a joint venture by Daniels Real Estate and Stockbridge Capital Group that will offer 528,000 square feet of office space and a 184-room hotel.
Seattle firm Wright Runstad, which has plans for a 58-story tower that includes 790,000 square feet of office space, doesn’t expect to open until late 2017 at the earliest.
To the north, in South Lake Union and Denny Triangle, where Amazon’s growth has fueled speculative development, Schnitzer also is moving forward with Urban Union, a 12-story, 291,000-square-foot office building at 501 Fairview Ave. N.
Trammell Crow, which paid a local family $14.3 million in September for the Williamsburg Court Apartments and two small adjacent parcels, is building a 21-story tower with about 356,000 square feet for offices, according to public records.
The market is likely to absorb the office space in the buildings opening next year, said Laura Ford, senior vice president for Colliers International.
“The good news is there is a lot of velocity in the market in addition to Amazon,” she said. As for the skyscraper projects now getting started in the central business district, “it’ll be interesting to see which ones and how many are built.”
— Sanjay Bhatt: email@example.com
Starbucks dropped from best list
The Seattle area is home to four of the 50 best large companies to work for, according to a survey by career site Glassdoor.
Near the top of the ranking is technology company F5 Networks, at No. 4. Slalom Consulting, a consulting firm, was 16th, while warehouse-club giant Costco Wholesale was 29th and the real-estate website Zillow was 33rd.
All told, that’s 8 percent of the total — not bad for a metro area with 1.13 percent of the country’s population.
But one usual suspect dropped off the list this year: Starbucks.
The Seattle coffee giant was 39th last year, but its satisfaction rate from anonymous employees participating in the Glassdoor website dropped slightly — from 3.8 to 3.7 on a scale of five. In any case, it was enough to push it out of the ranking.
Why the drop? Glassdoor says the company’s employees still rave about “incredible career opportunities and promotions from within,” as well as above-average pay and “amazing benefits.”
But also some complaints were more frequent in the past 12 months, among them “work-life balance slightly tougher to manage” and shake-ups among local district management.
The news comes as Starbucks tries new measures to keep its huge workforce happy and motivated, ranging from allowing visible tattoos to giving workers a pay bump next year. The company last summer changed its shift scheduling policy after a New York Times story highlighted how using software to schedule shifts on short notice made a barista’s life hard to manage.
A Starbucks spokesperson said that “in January, we’ll be making the next wave in a series of investments in the areas of pay, performance and development, and recognition — all inspired by partner feedback shared this fall.”
An upcoming indicator of that feedback may be whether CEO Howard Schultz retains his enviable No. 9 ranking among Glassdoor’s Top 50 CEOs, where he enjoyed a 93 percent approval rating. Those results will be announced in the next few months.
— Ángel González: firstname.lastname@example.org
Snowflake Lane boosts eateries
Each year when Bellevue Way is transformed into Snowflake Lane, complete with falling snow, music and performers, the holiday extravaganza brings more than just holiday spirit to spectators — the restaurants get quite the holiday bonus as well.
For a decade, the 20-minute nightly outdoor show has brought thousands of spectators to The Bellevue Collection. The show starts at 7 each night from Nov. 28 to Christmas Eve. Then for the next week, an American-themed version of the show picks back up as Celebration Lane U.S.A.
McCormick & Schmick’s Bellevue site has had a front-row seat to Snowflake Lane since its inception. As one of the few restaurants on Bellevue Way that takes reservations, the steak and seafood eatery’s window seats are the first to go, said general manager Paul Pierce.
“You can go outside and watch it and then come right back inside where it is nice and warm,” he said.
Between the mall’s Christmas rush and the nightly shows, he said, McCormick & Schmick’s does 50 percent more business this time of year.
Across the street, Cactus, which is on the third floor of Bellevue Square and has windows overlooking the parade, sees about a 20 percent increase in business over the holidays. Co-owner Marc Chatalas said Snowflake Lane is a large part of that bump.
Chatalas and his brother opened a new restaurant next to Cactus in October and are seeing the benefits of its first holiday season. Their new Tavern Hall has three areas that can be rented for private functions, which have been all booked for the holidays, he said.
In 10 seasons, Snowflake Lane has racked up some impressive statistics.
• The drummer boys and girls go through more than 300 drumsticks and mallets each season.
• The Jingle Belles, Snow Princesses, Sugar Plum Fairies and rosy-cheeked drummer characters go through about 1,350 red lipsticks each season.
• More than 100,000 gallons of faux snow has fallen on Bellevue Way during the decade.
Kemper Freeman, the man behind the Bellevue Collection, says it costs $1 million to put on the show every year.
— Coral Garnick: email@example.com