The old 10-story Bellevue Corporate Plaza, located in the business core of Downtown Bellevue, may receive an additional twin tower building with both office and hotel space, however it may likely not happen until the next cycle.
NBBJ, a Seattle-based architecture firm, presented their proposal for “Bellevue 600,” located at 600 108th Avenue N.E., Thursday evening to the City of Bellevue’s Development Services Department for review under a Master Development Plan. The decision usually takes four to six months and, if approved, the project will be vested under land use codes for the next ten years, allowing ample time to move forward once the developer is ready. The 34-story Class A office building and 41-story business hotel would add approximately 1.5 million square feet of space to the original building built in 1980.
Seattle-based Touchstone Corporation, the developer on the project, has been in commercial real estate in the Puget Sound market area for more than 25 years. In December 2014, it was acquired by another Seattle-based real estate firm, Urban Renaissance Group. Several efforts to speak with Touchstone and Urban Renaissance were unanswered.
The proposed two towers consist of 800,000 square feet of office space and a hotel with 500 rooms. Construction would require the current three-story parking garage behind the plaza to be demolished, and in its place, NBBJ is proposing a four-story 441-stall above ground parking garage and a seven-story, 1,578-stall underground garage, as well as a plaza and garden on its roof. NBBJ is acting as the development manager and architect on the project at this time.
During Thursday’s meeting, the City recommended to NBBJ that it should be aware of traffic congestion on 108th Avenue, in consideration of current construction on 106th Avenue and other future projects under review. “I can’t speak for transportation, but I do know that every one of those projects is looked at in terms of how it fits into the overall plan for downtown,” said senior planner Sally Promer Nichols.
NBBJ admitted that there would be both advantages and disadvantages to delaying the development due to other construction in the area of the proposed site. “There are plenty of office buildings under construction, I don’t think you’re going to see any more office buildings built in this cycle. There’s just too much vacancy, and we have the Expedia [departure]. Three or four years from now we’re out with a package to find partners to actually build it, then we’re in a more detailed process with the city,” said John Thomas, project manager with NBBJ.
According to several experts in the market, the city of Bellevue will see an additional 1.5 million square feet of class A office space added by 2018. As this significant increase in office space shifts the supply curve, all eyes will be on Bellevue watching to see what happens next in the market. According to JLL’s Office Statistics Report for 2015 fourth quarter, Downtown Bellevue had a total vacancy of 12.2 percent. Exactly how this anticipated increase of space will affect vacancy in the next few years is the big question everyone wants to know. Especially with Expedia moving to Seattle in 2019.
Hotel occupancy in and near Seattle has remained strong for several years, according to Kidder Mathews Hotel Market Report for the fourth quarter of 2015. The number of significant hotel sales in this region was the highest since the recession. Eight hotels were completed during 2015, eight more are expected to open during the coming year, and at least 15 are under construction. However, in some markets, increases in supply are likely to outpace growth in demand, driving down occupancy rates and intensifying price competition. Over the next three years, as new hotel rooms open in the central business district of Bellevue, the current occupancy rate of 72 percent is expected to decline, as well.
Because of a concern for high vacancy rates and the amount of current construction in Downtown Bellevue, Thomas said it may not be until the next development cycle before groundbreaking would commence for this project. He provided no estimate for completion of the development.
Image courtesy of NBBJ.