By Jack Stubbs
Bellevue’s CBD has been a hotbed of development and investment activity in recent months, and a unique investment opportunity—which is adjacent to a 750,000 square foot office property 100 percent leased to Microsoft and a two-tower 455-unit luxury residential complex—is now on the market.
The Shops at Bravern, a three-story, 313,119 square foot retail destination located in the heart of Bellevue’s central business district, was put on the market recently. The property is exclusively marketed by several HFF offices. This company did not respond to requests for comment about the property in time for the publishing of this story.
The Shops at Bravern encompasses approximately 40 luxury and entertainment retail stores in a three-level open-air format setting. The retail village, developed in 2009, is part of a larger mixed-use project that consists of 455 luxury residential units and 750,000 square feet of Class A office space, which is 100 percent leased to Redmond-based, technology giant Microsoft. The development also includes the Meydenbauer Center (a convention center that attracts around 150,000 visitors per year) and a seven-story parking garage that contains 3,130 stalls.
The property is located at 11111 NE 8th St., in the center of the main commercial corridor on the corner of 8th St. and 112th Avenue. The asset is roughly half a mile from access to Interstate-405 and about two miles from Washington State Route 520. Additionally, the retail destination is directly adjacent to the under-construction Wilburton East Link Light Rail station, a $3.7 billion project set for operation in 2023. Once active, the light rail station will serve more than 50,000 passengers a day, connecting Bellevue to downtown Seattle and SeaTac Airport.
According to HFF’s marketing flyer for the property, The Shops at Bravern currently has an occupancy rate of 87.9 percent, a figure indicative of a property that offers significant and immediate value creation through continued lease-up of available space and mark-to-market rent opportunities. The flyer states that these two factors will help to grow the NOI for the property to over 145 percent in the next ten years. The NOI currently sits at just over $8.5 million and could grow to $20.5 million over the next decade.
The retail complex includes various high-end national and international luxury retailers—including Neiman Marcus, Louis Vuitton, Gucci, Moncler, Prada and Hermes Paris, among others—several of which do not have other competing locations in the area or in the Pacific Northwest, according to the flyer. Since 2014, ownership has replaced or added 19 new tenants, replacing middle-tier retailers with global luxury brands. Over the past 25 months, over 96,000 square feet worth of new leases and lease expansions have been signed (with 8 new leases/lease expansions encompassing 85,550 square feet signed in 2017). Some of the other tenants in the complex include Dollar Shop, Lifetime Fitness and Gene Juarez Spa and Salon.
The Shops at Bravern, located in Bellevue’s CBD, sits in a demographically affluent area. Within a 5-mile radius of the site, the average household income is $166,000, a figure almost three times greater than the national average. In a 10-mile radius of the property, there are over 58,000 millionaires. From 2010 to 2018, Bellevue’s population increased by 12.9 percent; and the city’s population is project to increase from 138,141 in 2018 to 146,948 by 2023. Bellevue is home to some of the nation’s major corporations including Microsoft, Expedia, Concur Technologies and Paccar, an American Fortune 500 Company.
The recent listing of the Shops at Bravern—one of the premier retail destinations in the Pacific Northwest—shows that activity in the city shows little signs of slowing. The property is also right across the street from where more commercial redevelopment activity is occurring. On March 19th, San Francisco-based developer Stanford Hotels Group acquired three parcels in downtown Bellevue—which could be slated for redevelopment—for a combined $128 million from Plus Investment USA Inc., an entity affiliated with Seattle-based Plus Capital Partners.
It is still yet clear what plans Stanford Hotels has for the parcels. However, according to a project description on Plus Investment USA’s web site, Plus Investment has plans in the works to develop a luxury, mixed-use 4-tower project called Elev8—located at the same address as the purchased parcels —that will include 350 condos, 423 apartment units, and 1,698 parking stalls.
The project, designed by MZA Architects, will also include Class A office space, a five-star hotel, retail space and urban pocket parks. According to the web site, “the project will bring a massive half-block transformation to what is currently the Griffin surface parking lot, a church building, and the Yuen Lui Photography building.” Plus Investment USA submitted preliminary project plans to the city of Bellevue in early March 2016.