By Meghan Hall
For the second time in two years, Bellevue’s Evergreen Office Park is for sale. Brought to market by Andy Miller of Kidder Mathews and Joe Lynch and Daniel Harden of Newmark Knight Frank, on behalf of real estate investment firm Pacific Coast Capital Partners (PCCP) LLC, the 88,642 square foot development is up for sale at a time when major companies such as Amazon, Google and Facebook are vying for space in Bellevue’s tight office market.
The Evergreen Office Park, located at 10940 and 11000 NE 33rd Pl. is about five minutes’ drive from Bellevue’s central business district. It was originally built in 1986,and is comprised of two Class A office buildings: Building One is two stories and is about 36,269 square feet, while Building Two is three stories and 52,373 square feet. The 4.34-acre property also has a parking ratio of 3.6 spaces to 1,000 square feet, for 310 total stalls, 108 of which are covered.
The development last sold in January 2017 when Foster City, Calif.-based Legacy Partners Commercial, now known as SteelWave, sold the property to PCCP for $21.45 million, or around $242 per square foot. According to King County records dated to the time of the transaction, $75,000 was deducted in personal property, bringing the taxable selling price to $21,375,000. Legacy had originally purchased the property for $16.35 million in 2006.
Kidder Mathews and Newmark Knight Frank did not immediately return The Registry’s request for comment.
The development was originally built in 1986 and has been renovated several times over the course of the property’s history in 1994, 2007 and 2018. According to a Kidder Mathews brochure with details of the property, over $3 million worth of upgrades have been recently added, including new lobbies, a courtyard amenity, site work, signage and tenant improvements. Currently, the development is 95 percent leased, and tenants have a weighted average lease expiration of over four years. The brochure states that average in-place lease rates are 11 percent below the current market rent of $29.50 per square foot, providing upside potential for the new property owner upon lease roll-over. When the property was purchased by PCCP in 2017, the property was 89 percent leased.
The property is easily accessible to Interstates 90 and 405, and State Route 520. Kirkland’s CBD is just 10 minutes away, and the Microsoft World Headquarters are to the east. The South Kirkland King County Metro Bus Service is located two blocks away, and the Light Rail connecting the Eastside to Seattle will run through the Spring District by 2022. According to the Kidder Mathews, these market fundamentals have helped solidify the 520 Corridor as one of the strongest Eastside submarkets over the past 18 months, with rent growth of approximately 20 percent. The 520 Corridor itself has a vacancy rate of just 1.95 percent, and Eastside vacancy hovers at around 4.46 percent. The Greater Seattle metropolitan area has generated over 100,000 jobs over the past two years, with growth across all industries, including biomedical research and professional services. As companies continue to grow, recent leases and expansion commitments on the Eastside will continue to put pressure on existing office inventory, with strong market fundamentals expected to continue in the future.