By Meghan Hall
After just over a year of ownership, RBT Investments has closed on the sale of about half Bellevue’s I-90 Corporate Campus. According to King County public records filed on Friday, April 3rd, RBT sold Building B on the property for an even $19 million. The buyer of the property was Property Ventures I-90 Corporate Campus LLC, an entity associated with William Larson of Bellevue.
The campus, located at 3460 and 3350 161st Ave. SE., includes two buildings that total 89,196 square feet. The Class B, multi-tenant property was originally constructed in 1982.
RBT Investments had originally purchased the property in August of 2018 for $28.025 million, or about $314per square foot. The seller at the time was Pine Forest Properties, a Seattle-based real estate development and investment firm. At the time, Pine Forest Properties only had ownership of the property for a year. Following RBT Investments’ acquisition of the property, the company decided to occupy Building A, while leasing Building B an affiliate company. According to public documents, RBT still occupies Building A.
Over the course of the past market cycle, office assets in suburban Eastside markets, such as the I-90 Corporate Campus, have benefitted from tech expansion. Companies such as T-Mobile and Facebook call suburban Bellevue home, in turn attracting other growing, tech-oriented firms looking for less expensive space. And, despite COVID-19, a recent report issued by Broderick Group examining the Eastside’s market dynamics during the first quarter indicates that these types of properties are better equipped to handle an economic slowdown than they were perhaps a decade ago.
“Consequently, we expect suburban markets to weather current economic headwinds more effectively than in previous downward cycles,” Broderick Group states in its report. “…In a tight overall market, with strong credit tenants growing on the Eastside, the prospect of tenants securing recession- era economics are unlikely at this time.”
At the end of the first quarter, vacancy rates in the suburban Bellevue submarket were still historically low, at 5.4 percent, while the I-90 corridor and Kirkland had vacancy rates of 4.1 percent and 4.7 percent, respectively. Between 2010 and the first quarter of this year, the average gross rental rate in the suburban Bellevue market grew from $30.18 per square foot to $37.91 per square foot, and inventory reached 4.482 million square feet. Additionally, Broderick Group noted, the only available blocks of space greater than 100,000 square feet on the greater Eastside are the Redmond Town Center, a former Macy’s retail store, and AT&T’s two former buildings in Bothell, indicating these Eastside submarkets could hold stable in the future.