A big-time technology firm is leaving Bellevue, but the city remains a top destination for innovation.
In April, online travel company Expedia.com announced plans to move its headquarters from Bellevue to Seattle by 2018. While that’s a heavy blow to Bellevue, the tech presence in this Eastside city just figures to grow with other innovative companies moving to town.
Further reaffirming the city’s tech standing are such projects as Dallas-based developer Trammell Crow Co.’s ultra-modern office development, which targets cutting-edge tenants and is scheduled to be completed by this year’s end.
“Bellevue is always on the map for consideration from the tech community,” said Steve Schwartz, Bellevue-based managing director for commercial real estate services firm JLL. “It’s absolutely a top-tier choice and attractive to the tech sector. We got a high-quality labor force, quality of living and [affordable] cost of living. The Seattle region is a global center of excellence, and Bellevue is part of that.”
Schwartz acknowledged, though, that Expedia’s departure will hurt Bellevue. “It will leave a big hole,” he said.
Expedia aims to relocate to a multi-building, waterfront campus in Seattle. The 40-acre campus would include an updated design for 750,000 square feet of existing structures with additional land for future expansion.
But “while Bellevue certainly will miss Expedia,” Schwartz said, “it opens up a wealth of opportunity,” especially when the city’s office inventory has been tight.
He expects that other tech companies will pursue the approximately 500,000-square-foot downtown space that Expedia will be vacating.
Schwartz noted that Bellevue is already seeing new tech additions. San Jose, Calif.-based e-commerce company eBay, for instance, has moved its Seattle-area operations to downtown Bellevue. Also, Kent-based outdoor retailer REI has picked Bellevue for a regional office focused on information technology.
Other tech companies that have been in Bellevue for years such as Valve Software are growing or plan an expansion, although that growth could lead them to relocate elsewhere, industry observers say.
But then there’s Trammell Crow’s 929 Office Tower, the first new Class A commercial building to rise out of downtown Bellevue since 2010. The 462,000-square-foot, 19-story structure with the latest amenities will cater to tech firms but also appeal to other prospective tenants.
“Our building is tailored to the trends and needs of these tech firms” but has also received “tremendous interest” from traditional fields such as finance and legal, said Tom Woodworth, Trammell Crow principal based in Seattle.
Bellevue has a “very, very strong base of tech companies that include” those involved in gaming, software and health care, Woodworth also said. “We do like the growth aspect of the Bellevue submarket. It’s active and dynamic.”
According to a recent JLL office market report, more than half of the current tenant demand on the Eastside is coming from tech firms.
“Many technology tenants are looking at the Bellevue CBD as their first choice,” JLL said, “but with vacancy down to 7.1 percent and limited large blocks of available space, many are also considering suburban markets on the Eastside.”
However, Bellevue’s central business district is projected to see delivery of an additional 1.5 million square feet in the coming year, JLL said. That new construction “will bring much needed supply to the market. This will provide additional opportunities for larger technology tenants to find sufficient space for their growing industry.”
Another JLL report noted that the Global Innovation Exchange (GIX) program is coming to Bellevue as well. GIX is expected to open in the fall of 2016, drawing top students, educators, professionals and entrepreneurs worldwide to tackle major tech and design challenges. The program is a collaboration involving University of Washington, Tsinghua University in China and Redmond-based tech giant Microsoft, which has committed $40 million to the effort.
GIX will just “bring additional resources, attention, labor and intellectual capital to our region,” Schwartz said.
Bellevue and its neighboring Eastside communities have “a thriving tech ecosystem,” added Michael Schutzler, CEO of the Seattle-based trade group Washington Technology Industry Association. “This is partly due to strong tech schools like UW Bothell, Bellevue College, DigiPen and Lake Washington Institute of Technology. It’s also due in part to the many angel investors, entrepreneurs and powerful tech companies [that] call Bellevue home.”