Home Commercial Costco Spends $10MM to Acquire 3.5-Acre Commercial Property at Site of 1.5MM...

Costco Spends $10MM to Acquire 3.5-Acre Commercial Property at Site of 1.5MM SQFT Expansion Underway in Issaquah

Seattle, Costco, MG2 Architects, Pickering Place, Issaquah, King County, development agreement, Pickering Trail, Issaquah Creek
Courtesy of MG2 Architects.

By Jack Stubbs

Costco, one of the largest retailers in the world and one of the most active developers in the city of Issaquah, has a large-scale development underway that is set to add up to 1.5 million square feet to its footprint in the King County city, where it has been headquartered since 1994. 

And the company recently recently made another acquisition, marking the latest chapter in the retail giant’s efforts to contribute to commercial growth and development in the city. On December 6th, the company spent $10 million to acquire a 3.5-acre commercial property which includes a roughly 32,000 square foot movie theater, public documents show. The seller of the property was Eastside Theatre Group LLC, an entity based in Mountlake Terrace, Washington. 

The subject property, located at 1490 11th Ave. NW, includes Regal Cinemas, a one-story, 32,200 square foot commercial structure built in 1995, according to King County records. 

The property is approximately half a mile from the company’s corporate headquarters at 999 Lake Drive, and marks the most recent step in a multi-year process between the City of Issaquah and Costco. The retail giant is currently located in the Pickering Place mixed-use development, and the current office space covers 700,000 square feet, according to a project description on the city’s web site. 

According to a 2017 statement released by architecture firm MG2—the design firm involved with the Pickering Place development—Costco and the City of Issaquah in 2014 entered into a 30-year Development Agreement that gave Costco the right to add about 1.5 million square feet of office space in the area around the company’s current campus—as part of a move that the city helps will allow it to further expand its long-term goals for its commercial core and improvement of transportation infrastructure. 

The proposed expansion includes a nine-story, 620,000 square foot office building with one level of below-grade parking and a ten-story, 685,000 SF parking structure with 35,000 square feet of programmed space at ground-level. Once complete, the high-performance office campus will be home to 4,000 employees.

As is the case with many public-private partnerships taking root throughout the Puget Sound region, the development team will look to create a project that conforms to the city’s existing urban fabric. A key feature of the development agreement clarified how the new Central Issaquah Design and Development Standards would apply to Costco’s growing campus, according to MG2’s statement. 

Pickering Place was developed under a more suburban development model with curving streets, large lawn areas, and substantial surface parking. In order to facilitate these design goals, the company submitted a future development initiative called “The Land Place,” which outlined how future development might occur on Costco’s campus. Both Costco and the city worked with city staff and the Development Commission to identify code-related issues based on the project’s conceptual site plan. 

Late last year, MG2 announced a major milestone in the Costco Campus expansion. In October 2018, Costco Wholesale received land-use approval from the city for its development. In an expansion of the original Master Plan, new project goals for the Issaquah campus emphasize the efficiency and sustainability, and the relationship between the city’s urban core and adjacent natural elements like Issaquah Creek and the Pickering Trail.  

“It’s an exciting time for our team as we work on another expansion for our key client,” said MG2 President Russ Hazzard at the time of the announcement. “It’s another rewarding relationship marker as we continue to do transformative work together.”