Demand Remains High for Bellevue Office

BELLEVUE, WA—A 7% increase for commercial and multifamily starts in the Seattle metropolitan area during the first half of 2018 was the result of a 66% surge for multifamily housing, which outweighed a 46% decline for commercial building. The metropolitan area registered yearly increases for its commercial total from 2011 through 2017, including gains of 27% in 2016 and 8% in 2017, so the first-half 2018 increase is maintaining a well-established upward track, according to a mid-year study by Dodge Data & Analytics.

There were five multifamily projects valued each at $100 million or more that reached groundbreaking during the first half of 2018, led by the $429 million multifamily portion of the $516 million 1200 Stewart St. mixed-use development, the $398 million multifamily portion of the $450 million Seattle Times mixed-use development, and the $200 million 6th Avenue and Wall St. building, all located in Seattle. The first-half 2018 decline for commercial building was relative to a strong first half of 2017 that included such projects as a $210 million office tower in Seattle and a $93 million Amazon distribution center in Sumner.

As part of the positive march in the first half of the year, Skanska purchased a 77,000 square-foot parcel at the corner of 108th Avenue NE and NE 8th Street in downtown Bellevue. Skanska will develop a class-A office project on a development site at the corner of 108th Ave. NE and NE 8^th, considered the gateway to the city center. The office tower will have approximately 500,000 square feet of commercial office space and ground-floor retail.

Located in Bellevue’s downtown core, the parcel is located near major Bellevue employers, including Microsoft’s Bellevue campus, Amazon, Salesforce, Paccar, Symetra, Expedia and Concur. The location is a short walk from the new light rail station and Bellevue transit center with direct freeway access to Interstate 405. The site is also walking distance from the region’s major retail destination, The Bellevue Collection, downtown hotels, as well as local restaurants and entertainment venues.

“Demand remains high for commercial office space in downtown Bellevue and a diverse set of industry-leading tenants continues to fuel the Eastside’s growth. Given favorable market dynamics, our team is eager to move this project forward quickly to create something truly remarkable for the surrounding community, the city of Bellevue and future tenants,” Murphy McCullough, Skanska executive vice president, tells GlobeSt.com. “Like 400 Fairview and our 2+U projects, we’ll have a particular focus on creating wholly unique ground-floor experience in this location.”

This land acquisition represents Skanska’s sixth development project in the Puget Sound region and its second project in Bellevue since it began development operations in 2011. Skanska is also under construction with 2+U, a 684,000-square-foot office tower in downtown Seattle, which delivers in July 2019. Adjacent to SAM and Benaroya Hall, and steps from the new waterfront, 2+U is 85 feet high which will create an urban village with public open space, 18,000 square feet of retail and arts/cultural spaces under the building.

Skanska’s last local land purchase occurred in October 2017 for the 2200 Block, a 19,440-square-foot parcel comprised of three properties on 4th Avenue in the Belltown neighborhood of Seattle, which is currently being designed and entitled for a 300-foot multifamily tower.

Other Skanska projects include Stone34, the Seattle headquarters for Brooks Sports, a trailhead delivering runners directly from the Burke-Gilman Trail to the running company’s first and only retail store, all while becoming Seattle’s first project to complete the Deep Green Pilot Program. With its Market Hall at 400 Fairview, Skanska assembled a mix of desirable local retailers, including a rooftop restaurant with views.