By Meghan Hall
Nearly four years ago, Vulcan Real Estate dipped its toes into the Bellevue commercial real estate market, purchasing Bellevue Plaza, a 60,000 square foot retail plaza at 117 106th Ave. Northeast for $45.35 million. Now amidst, a real estate boom in Bellevue, Vulcan is now preparing to break ground on a three-building redevelopment of the property that will transform an entire half-block. The project, called Bellevue Plaza after the original center, will total more than one million square feet upon its anticipated completion in the fourth quarter of 2022.
When Vulcan acquired the former 1960s-era retail center, the developer stated that it did not have immediate plans for the site, but that the property would be part of a long-term vision that it had for Bellevue. While Vulcan had previously owned several commercial properties in Bellevue, the acquisition of Bellevue Plaza was the company’s first buy outside of South Lake Union.
“A couple years ago, we decided to take a pretty significant position in Bellevue and bought what are essentially three development sites there. [Bellevue Plaza] was the first one we bought. We’ve always seen it as a development site with some interim income characteristics,” Lori Mason Curran, Vulcan’s director of real estate investment strategy initially told The Registry in June 2018.
Vulcan’s originally considered a mix of residential and retail for the site, but later pivoted, offering up plans for a three-tower office development instead.
“Location played a key role in our decision to build office at the Bellevue Plaza site,” Robert Aaron, senior director of real estate marketing and leasing for Vulcan said to The Registry. “It is one of the best office locations on the Eastside, presenting the unique opportunity to create a campus-like setting with a large mid-block plaza and elevated terraces with stunning views. The property is located in Bellevue’s Class “A” CDB urban environment, featuring leading retail and restaurant options, and situated adjacent to the best of Bellevue’s urban amenities including Main Street, Bellevue Downtown Park, and the Bellevue Collection. The site is also near several freeway and public transit options, making it highly accessible.”
Current plans for the 3.4-acre site include two phases according to city documents. Phase I, which will deliver one, 17-story office tower will include 297,400 square feet of office, 15,333 square feet of ground level active uses and 724 parking spaces. Phase II will bring another two towers to the property. The North Tower will rise 17 stories and include 290,680 square feet of office space, while the South Tower will total 15 stories and 292,990 square feet. 12,880 square feet of ground floor uses and 1,470 parking spaces are also a part of Phase II.
An outdoor, mid-block plaza, elevated terraces and transparent, two-story lobbies are all features of the project. A common podium language will wrap around the base of each tower.
Graphite Design Group and Compton Design Office are the architects for the project, and GLY Construction is the general contractor. The development is targeting LEED Gold, Salmon-Safe Certification and Wellness Principles.
Design approval for Phase I has been secured, and the City of Bellevue has determined at the beginning of January that no further environmental analysis was required for the project, allowing Vulcan to prepare for construction. According to the developer’s website, site work will commence early this year, with initial occupancy slated for the third quarter of 2022 and final occupancy following shortly thereafter, in the fourth quarter.
According to Vulcan’s website, the property is now looking for office tenants.
While Bellevue Plaza was Vulcan’s first buy in Bellevue, several other acquisitions quickly followed suit. In July of 2017, Vulcan acquired to adjacent lots at 435 108th Avenue NE for $24.25 million. About a week later, Vulcan also purchased an additional parcel on 108th Ave. NE for $26 million. And, in mid-August of the same year, Vulcan acquired four parcels at 201 106th Ave. NE for $13.8 million.
Following closely on the heels of Bellevue Plaza are Vulcan’s plans for 555 108th Ave. NE., another one million square foot development. The 42-story tower will include roughly 970,000 square feet of office and 30,000 square feet of retail. NBBJ is the architect and Turner the general contractor, and the project is slated for completion during the first quarter of 2023.
The delivery of both projects is expected to be ideal for Vulcan, as office vacancy on the Eastside, and particularly in Bellevue, remains at record lows. A new report released by Broderick Group at the beginning of the year predicts that Bellevue will thrive as a major market for office as some of the world’s largest firms—Amazon, Facebook, Google, Microsoft, and T-Mobile—continue to expand their presence outside of Seattle.
Currently, the entire Eastside market contains about 35.6 million square feet, with Class A properties accounting for just over half of that inventory. Vacancy in Bellevue sits at 3.6 percent, and will unlikely get much lower, as the market is already constrained. With so little space available, and 93 percent of all new space coming to market in 2020 pre-leased, rental rates are expected to rise around eight percent, building upon the Bellevue office market’s already astonishing climb.