The Seattle PI just released an article that discusses the growth in Bellevue. The article provides some great insight to the Bellevue Condo Market.
With 2 million square feet of offices, 403,000 square feet of retail and commercial space, and 3,300 apartments and condominiums under construction right now, Bellevue is shedding its traditional role as Seattle’s demure younger sibling.
Businesses are moving there to be closer to Eastside employees, and residents see it as getting the urban experience without the Seattle edginess. But some longtime residents do not like what they see the city becoming. Meanwhile, the uncertain financial climate nationally might spell trouble for some development plans.
Not secondary anymore
Bellevue Planning Director Matt Terry said Bellevue was a low-density, suburban town 29 years ago, when the city hired him to rewrite its downtown plan and zoning so that it encouraged taller, denser development. The first high-rise went up in 1983, and two or three were added in each of several development cycles since, but the new spurt is much bigger.
“I think Bellevue’s sort of reaching a maturation point,” Terry said.
Nearly all 2 million square feet of offices under construction in downtown Bellevue are preleased; current lease rates are a bit higher than downtown Seattle’s.
“It used to be it was always considered to be a secondary market,” said Matthew Gardner, a local land-use economist who works with developers. “That has changed dramatically.”
The change started in 2004, when Symetra Financial decided on downtown Bellevue for its headquarters, Gardner said. Downtown Bellevue has since gained a heavy tech presence, including Microsoft, Yahoo, Google and Expedia.
In addition to current construction, city officials are reviewing proposals that would add another 1.3 million square feet of offices, 648,000 square feet of retail and commercial space and 2,700 apartments and condos.
What’s driving the demand? Well, driving, for one thing.
Congestion and, to an increasing extent, the price of gas are causing people to want to work close to where they live, Gardner said. Bellevue is attractive for new hires, particularly because of its strong schools, and the Eastside’s educated, affluent populace draws employers and retailers.
Those same issues also are helping spur the condo demand in downtown Bellevue — think of it as employees moving closer to jobs that moved closer to employees.
Office construction in suburban areas around Bellevue has been strong for two decades, but nearly all of those sites are now taken, said Jim Bowles, Northwest senior managing director for CB Richard Ellis. “At the same time, people are now wanting to be in downtown Bellevue.”
Michael Brandt, a 24-year-old who grew up in Bellevue, works in the city’s downtown doing marketing for Eddie Bauer, runs the Web site downtownbellevue.comon the side and is scheduled to move from his townhouse outside of downtown to a Bellevue Towers condo in November.
“I kind of associate myself with what’s going on in this area,” he said. “It’s a lot of new, young growth.”
Dean Jones, president and chief executive of Realogics, a Seattle condo-marketing firm, said several massive projects now under construction “are quite literally changing the downtown Bellevue landscape overnight.”
The Bravern, for instance, will add 456 condos and 620,000 square feet of offices in two towers above a 240,000-square-foot commercial center anchored by luxury retailer Neiman Marcus.
The Braces moved to downtown Bellevue after their kids grew up and moved away. They had looked at downtown Seattle, but didn’t feel as comfortable there.
“There’s just too much stuff going on, too much panhandling,” George Brace said. “It’s just not, to me, a friendly, fun experience.”
Many others seem to share the perception that downtown Bellevue is a safer or, at least, less-edgy alternative to downtown Seattle.
“It’s reserved nightlife,” Brace said. “It’s not the hardcore clubs, but it’s these elegant restaurants, elegant bars and classy people.”
Skittishness affecting plans
Bellevue’s growth spurt has dismayed some longtime residents.
“It’s ruined the city for the vast majority of citizens,” David Plummer, who has lived in Bellevue since 1964, said at a May city open house about development. “There’s no human scale to it.”
Even supporters worry.
“I’m concerned most with how they’re going to handle the vehicle traffic,” Melissa Matkin — who has lived in Bellevue for 36 years, invests in real estate and plans to move into Bellevue Towers — said at the open house. “Once these things are all built out, are people going to be able to get around?”
While the city has plans for more road, pedestrian and bike connections, its biggest need is high-capacity transit, Terry said. “We have to have light rail service into downtown Bellevue. That’s critical to our future.”
But there is some question whether every proposed project will be built — and when.
Last month, developer GIS International Group announced it was delaying groundbreaking of its downtown Bellevue European Tower project “in anticipation of bringing the project to market in a better economic climate.”
GIS Chief Operating Officer Eugene Gershman said many buyers had asked to delay their closings because they worried they would not be able to sell their current homes in time, and he hoped to break ground this fall.
Although Gershman said construction financing was not a problem for his project, the U.S. housing slowdown has caused skittishness among banks and investors who finance developments. Thanks to the financing situation and continued cost of construction, just one condo project has much of a chance of breaking ground in downtown Bellevue this year, Jones said. But, he said, developers had not proposed more projects than downtown Bellevue’s market could accommodate.
Terry acknowledged the current uncertainty, particularly for residential projects, at a Realtor symposium on the city’s growth last month.
“Obviously the national economic environment concerns us,” he said. “We’re very attentive to the things we can do to help these projects be successful.”
DOWNTOWN BELLEVUE, BY THE NUMBERS
· Housing: 3,750 units now; 11,100 forecast for 2020
· Population: 5,000 estimated now; 14,000 in 2020
· Offices: 8 million square feet now; 13.1 million in 2020
· Retail: 3.9 million square feet now; 5.2 million in 2020
· Jobs: 38,100 estimated now; 63,000 in 2020
Source: City of Bellevue
P-I reporter Aubrey Cohen can be reached at 206-448-8362 or email@example.com. Read his Real Estate News blog at blog.seattlepi.com/realestatenews.
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