By Jack Stubbs
On August 1st, a residential redevelopment site totaling almost three acres that includes a two-story office building and is located along the Bel-Red corridor in Bellevue sold for $13.75 million. The seller, Kirkland-based MB Investments III LLC affiliated with Shahbano Agha and Mirza Agha, was represented by Kidder Mathews’ Seattle team including Andy Miller, Joe Lynch, Jason Rosauer and Rob Anderson.
The buyer was a Taiwanese investor, according to one industry source, and was represented by Josh Heyum, principal of leasing and sales at Kirkland-based DCL Management. Heyum did not respond to calls for comment about the transaction in time for the publishing of this story.
According to Rosauer, the timing of the sale came at the right time for the seller. “From the seller’s perspective, this deal was [about] timing in the market…they purchased it right and took good care of the asset and kept the rents comfortably below market and [kept] the place full,” he said. “They have another opportunity to pursue that is more enticing right now than holding onto this [property]; there’s really no master plan other than that.”
The Bel-Red offering is located at 13555 Bel-Red Road and is currently occupied by a commercial property. According to public documents, the property totals 2.77 acres and includes a two-story Class C office building constructed in 1978 that totals 32,333 square feet. According to Google Maps, the building is currently home to a number of companies including Brain Child Learning Center and LaBelle Bridal Salon. Audio visual equipment supplier Avidex Industries LLC also occupies the building as the company’s headquarters.
The buyer has not yet submitted any project plans to the city. However, current market conditions in the surrounding area suggest that the existing tenants will remain in place, according to Rosauer. “The project next door and the project half a block up the street have yielded tremendous results and have sold out extremely fast, which has demonstrated the demand for that marketplace,” he said. “To me, that in itself is a sign for a land play down the road…but these tenants in place are valuable to the buyer, who has no intention of moving [them].”
Additionally, Rosauer thinks that the property has significant redevelopment opportunity in the future. “This is really what I would consider a covered land play…we have tremendous potential with development on this site, but right now the buyer bought it as an in-play cash-flowing investment as far as I can tell,” he said. “The buyer paid a slightly higher price than other sales years prior for the opportunity to have the cash flow, but also to have the potential to develop townhomes in the distant future,” he said.
The property’s location is one of its main assets, especially considering the in-the-works EastLink Light Rail station, according to Rosauer. “I think it’s an area of tremendous growth, especially with what’s going on with the light rail station,” he said. When operational in 2023, the 14-mile East Link Extension, a $3.7 billion project that will be comprised of 10 stations, will allow riders to get from South Bellevue to Sea-Tac Airport in 50 minutes and from the Overlake Transit Center to the Bellevue Transit Center in 10 minutes.
Along with the Bel-Red offering, there have been a couple other redevelopment opportunities put on the market in recent months. In early April, an 8-parcel property totalling 41,200 square feet called Campus Station—located at 4202-4238 12th Ave NE just three blocks from the University of Washington—was listed by Colliers Seattle’s Multifamily Property Advisors Team.
According to Colliers, Campus Station is the largest single-fee assemblage brought to the market since the U-District was rezoned in 2017. In terms of potential development opportunities on the site—which is currently occupied by a couple of apartment buildings that contain approximately 60 units—the area can accommodate either 549 market-rate units or 372 units of student housing, as well as 348 parking stalls. The site also allows potential hotel and office uses.
And in mid-July, a 1.93-acre site located at 1400 NW 56th St. in Ballard—available for the future development of a multifamily, condominium, hotel or office project—was put on the market by CBRE’s multifamily team. The property is currently occupied by two retail tenants, Ballard Market and Quality Sewing and Vacuum.
Geographically, the site also occupies a prominent location given its proximity to a future light rail station: the property is near the planned Ballard Link Light Rail Station, which will open its northern spur serving the Ballard neighborhood starting in 2035. The opening of the station in 2035 aligns with the expiration of the tenants’ existing leases at the property in 2034, and will allow riders to get from Ballard to Westlake in 15 minutes and will have easier access to Expedia’s World Headquarters, Seattle Center, South Lake Union and downtown Seattle.
