By Kate Snyder
Several development projects in King County’s Eastside were nearing completion during the first quarter of 2024, however there is little for the region on the horizon, according to a market report recently released by Broderick Group. The report, called “Q1 2024 Eastside Office Market Overview,” cites rising vacancy and increased debt costs, as well as Microsoft ’s retreat from Bellevue, as primary reasons for the projected development drought ahead.
In Bellevue’s Spring District, construction wrapped up on Meta-leased Block 13, which spans 218,000 square feet, according to the report. The project is the last of six Spring District Meta buildings, which brings the whole campus’ footprint to 1.8 million square feet. Another project, Amazon-owned 600 Bellevue, is rising in the Central Business District skyline and the 850,000 square foot tower will be completed in late 2025. That development is the final Amazon-occupied tower in the city’s downtown following the first quarter delivery of Schnitzer West’s 605,000 square foot The Artise on NE 8th, which remains in shell condition.
Another project, Houston-based Patrinely Group’s 480,000 square foot Four106 on NE 4th, has topped out its concrete core and will be delivered in the second quarter of 2025. Tour activity at both these new developments has increased, though demand from full building users is currently muted. Additionally, The Eight, developed by Skanska, is a 552,000 square foot tower on NE 8th in downtown Bellevue that is scheduled to receive TCO in early April. The report shows that the asset currently sits 70 percent leased with strong activity on the remaining seven floors in the lower bank that are available.
Elsewhere, the region’s development projects are facing even more uncertainty.
Google has paused development of a building on its Kirkland Urban and backed out of plans for a one million+ square foot project at the Lee Johnson site across I-405. Additionally, the firm has left more than 400,000 square feet of space unfinished in its recently completed Kirkland Urban South Building and another building on the site.
Apart from Kirkland Ascent, the 57,000 square foot new development in Kirkland nearing delivery, no additional office development projects are under construction or will break ground in the near future across the Eastside.
As the region continues to climb out of economic uncertainty, the report states that part of the recovery will include the repurposing of office space through the demolition of outdated buildings to make way for new residential communities, lease buildings being purchased by owner/users as Costco recently did and atypical office uses such as educational, medical and quasi-retail space taking over former vacant office buildings.
“With Big Tech in retrenchment mode, the historical primary drivers of demand are a massive weight around the neck of the market,” the report states. “More likely, it’s going to require consistent sustained new tenant demand coupled with landlord patience to ensure a recovery that’s likely to take years.”
