Investors are doubling down on downtown Bellevue, which has the region’s tightest office market, highest apartment rents and, someday, light-rail stations.
Investors are doubling down on downtown Bellevue, which has the region’s tightest office market, highest apartment rents and, some day, light-rail stations.
In the region’s biggest office deal so far this year, Houston-based Hines Global REIT last week acquired The Summit, a two-building office complex, for $320 million.
The office towers’ tenants include New York Life Insurance, Perkins Coie, Puget Sound Energy and Sterling Savings Bank. The seller of the 524,000-square-foot complex was Canadian real-estate investment firm Ivanhoé Cambridge.
The sale broke the high set just weeks earlier in Hines’ $205 million acquisition of the nearby Civica Office Commons complex.
The Summit property along Northeast Fourth Street, between 108th Avenue Northeast and 110th Avenue Northeast, includes a future development site with a permit for a 15-story office tower, Hines said.
Ty Bennion, a Hines senior managing director, said in a news release that the company is “excited to control one of the premier build-to-suit opportunities in the Northwest.” He added that the 330,000-square-foot Summit III tower could be ready for occupancy in 24 months.
Office brokers say that could be an attractive opportunity for Bellevue-based Expedia, which is hunting for more office space before its leases expire in 2018.
Meanwhile, Plus Investment USA, which is financed primarily by investors from mainland China, says it plans to develop a large mixed-use residential development in downtown Bellevue on the half block it’s acquired south of Northeast Eighth Street.
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Last month a Plus partnership paid Beacon Capital Partners $45.9 million for a nearly three-acre parking lot on the northwest end of the block. The company paid $30 million in January 2014 for the Bellevue First Congregational Church’s centrally located, 1.5-acre property on the block’s northeast corner.
The company expects to break ground on the first phase in early 2016, said Kevin Corbett, CEO of Plus Investment USA. The site would feature two residential towers above a podium of retail, on par with the 42-story Bellevue Towers.
The units could be condominiums or apartments, depending on the state of the market, Corbett said.
Further south, Bellevue-based Wig Properties paid Red Lion Hotels more than $34 million last month for its six-acre property on 112th Avenue Northeast just west of Interstate 405. King County records show the 181-room Red Lion Hotel was built in 1969 and underwent major renovation in 1989.
In a regulatory filing, Red Lion Hotels said the hotel will continue to operate under its brand for several years.
But Wig, which owns retail centers in Tukwila, Lakewood and Olympia, said it plans to eventually redevelop the entire parcel, with input from the community and the city.
Across the street from the property, Sound Transit expects by 2023 to open the East Main station just south of Main Street. Moreover, the city is discussing raising limits on building heights in the neighborhood.
Paul Sweeney, a broker at the Broderick Group, said the flurry of deals is an indication of how investors’ perceptions of Bellevue have changed.
“Downtown Bellevue in years past was seen as a suburban setting, but now it is viewed as a prime urban location with excellent transit, a 24-hour nightlife and available nearby housing,” he said, “and that’s what the majority wants to buy right now.”