By Jon Peterson
Des Moines, Iowa-based Principal Real Estate Investors is developing a new 75,000 square foot shopping center in Bellevue that for now is called Bellevue North. The property is located at the corner of Northeast Fourth Street and 116th Avenue Northeast.
The real estate investment company declined to comment on the development cost of the project. The project is under construction now and should be completed by September of 2016.
“We feel this project is one that gives the retail tenants a lower price alternative than being in shopping centers in downtown Bellevue. All three of our tenants were very interested in finding sites that were away from downtown Bellevue, but still in areas that had strong demographics,” says Rod Vogel, senior managing director with Principal.
The development is 100 percent leased to three tenants. REI has a lease for 40,000 square feet, HomeGoods for 22,000 square feet and Trader Joe’s for 12,000 square feet. Principal sees that the project has a three- and five-mile trade coverage area. In this area the population varies from 95,000 to 219,000, and the household income goes from $121,000 to $133,000, according to an e-mail received from Principal.
The retail market remains a tight one for the Bellevue submarket. “The vacancy for this submarket for retail properties is around five percent, which should attract a lot of interest in the market from both tenants and investors,” said Vogel.
The land for Bellevue North covers 3.1 acres. Principal is a 100 percent owner of the property. It has hired Seattle-based KG Investment Management as a fee developer on the project. This company has no ownership stake in the property.
This property is at the northeast corner of the intersection. Principal owns another five acres at the southeast corner of the intersection. On this parcel the investor has plans to build another shopping center totaling around 100,000 square feet. The actual starting time on this project hasn’t been determined at this time. It will be dependent upon signing some leases with tenants. KG Investment will also be the fee developer on this project.
Both of these retail projects will be placed into the Principal Enhanced Property Fund. This is a core plus open-ended commingled managed by Principal. The current gross asset value of the assets in the commingled fund is $2 billion. It was formed by the manager in 2004.
The Enhanced Property Fund has a two-pronged investment strategy. “Around 75 percent of the fund is made up of core assets. The other 25 percent can be invested in value-add or development type of transactions,” said Vogel. The capital is invested in the four main property types of office, industrial, retail and apartments.
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