More than a month ago construction came to a halt, sending rumors flying about a falling out between Horbach, owner of Bellevue-based E&H Properties, and his financial partner, Barnes & Nelson Union Partners. Since, DPR Construction, the project's primary contractor, has filed a lien to the tune of $8.84 million. DPR stands at the head of the line of contractors and subs also looking to get paid. Altogether, claims now total roughly $9.5 million.
With a $22 million bridge loan maturing next month, Horbach is scrambling for financing to continue the 20-story high tech tower. The 357,000-sf glass-skinned Technology Tower sits at the Southwest corner of Northwest Fourth Street and 108th Avenue Northeast. As of last year, Horbach had committed to spending $100 million to develop a total of seven towers of mixed uses on the property.
Now, however, it appears to be a scramble for Horbach just to find the financing to complete the Tech Center.
Horbach is reportedly attempting to solve his financial woes by unloading part of the land he has compiled along Northeast Eight Street, on which he had envisioned a two million-sf office, apartment, hotel and retail development. GlobeSt was unable to reach the developer on deadline to confirm reports the property is available at $175 per sf, or $7.6 million per acre.
A GlobeSt source in the real estate investment community had previously been approached to source loans for Horbach. Speaking on anonymity they say, "The valuations we saw Horbach using to raise money are pretty aggressive. It's hard to borrow money right now. And, with the market the way it is, who would want to step into land at $175 a square foot. Prices have been coming down. If he's going to have any luck selling that property, he's really going to have to adjust his asking price."
Adding to Horbach's challenge is the estimated 2 million sf of sub-lease space now on the market. Being on the wrong side of the supply-and-demand picture in Bellevue, the question is whether Horbach will be able to obtain the financing necessary to build his high-tech office tower.
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