Condo developer, Vancouver, B.C.-based Bosa Development, paid just a little over $35 million on Monday for a nearly 19,000 square-foot parcel in downtown Bellevue containing a small strip retail mall, public records reveal.
The 1.5 acres is located at 10605 NE Eighth Street, about a block away from Bellevue Place and Lincoln Square, near the heart of the city’s retail core. The property was formerly where previous property owner, Bellevue-based Sterling Realty Organization, and New York City-based Rockefeller Group had proposed a project called Sterling Center, a 300-foot 20-story high-rise office tower that was to be completed mid 2017, according to public records. However, it was later curtailed before construction began for unknown reasons, sources say.
I can see why Bosa would decide to build condos, it’s beginning to get really expensive to rent here in Bellevue
Arielle Dorman, an associate vice president for Kidder Mathews in Bellevue who specializes in the sale of multifamily assets, says there is a relatively low supply of condos in Bellevue’s submarket and that there hasn’t been any new construction since 2008 and 2009. “There’s been kind of this void in the market,” Dorman said. “I can see why Bosa would decide to build condos, it’s beginning to get really expensive to rent here in Bellevue.”
Dorman explained that as the condo market supply is low, and it isn’t meeting demand in downtown Bellevue. However, she added that it would be tough to pinpoint the submarket’s strength, due to where it is in the current cycle. When property is purchased and a project is proposed, it takes approximately three years for it to be completed. This makes it incredibly difficult to know exactly where the real estate market will be once the project is ready to be delivered, Dorman says, not to mention other ever-changing markets, such as the financial market.
Downtown Bellevue is not very big with a radius of about eight blocks. “It’s kind of like an island, there isn’t a lot of land that is zoned for high-rises and condos,” Dorman said. “So the land prices are pretty expensive because the demand is so high. Amazon just announced that it’s taking the entire tower of Schnitzer West’s 425 Centre, and it’s supposed to bring about 1,300 employees.”
This additional job growth should drive the apartment market, says Dorman, which will help to absorb all of the new development that has recently come online. “The demand is strong, apartments are going up and filling up quickly,” Dorman said. “Main Street has been the hottest street for development, in the last 18 months there are three projects that have been completed and have leased up, or are at the tail end of leasing up. It’s happened pretty quickly.”