This morning I attended a Bellevue Downtown Association “Downtown Talks” event. Despite being at 7:30 am (I am not a morning person!) the event was loaded with fantastic information about the transformation of Downtown Bellevue. Guest speakers were Kate Joncas, Director of Urban Strategy & Development, and Gary Guenther, EVP at Kidder Matthews. I took some notes:
- Downtown Bellevue commercial space has a very low, 6% vacancy rate. That being said, the spaces are only 40% occupied following the impact of the pandemic. That number is increasing daily, however, as more people return to the office. Most commercial leases are 5-10 years so tenants have not had a chance to make any changes during the pandemic.
- Rental rates are higher than ever at about $70/ft including expenses. New office space is closer to $80/ft.
- There is 16.4 million total square ft of commercial space under construction or planned. That is about twice the amount of space in Downtown Tacoma!
- One notable project is the Barnes and Noble site on 106th. 3 towers are planned, rising to 600 ft tall. Completion will be 2026 with more than half hotel/residential.
- Amazon has committed to 6,332,000 sq ft in eight projects for about 30,000 employees. This is more than the official HQ2 in Crystal City, VA (up to 4.9M sq ft)
- As a comparison to Bellevue, Amazon has 13,000,000 sq ft in Seattle
- Meta (Facebook) has committed to 1.8 million sq ft in Bellevue’s Spring District
- Microsoft is completing 17 new buildings which will house an additional 8,000 employees
- Google is adding 1.65 million sq ft in Kirkland on a new campus
- Consensus is that people are indeed coming back to the office, but it will take time.
- Return to normal just not at the office!! In person activities have increased in fun venues, but not at the office….yet:
o 93% NBA Games
o 84% TSA Checkpoints
o 81% Movie box office
o 80% OpenTable Diners
o 40% at the Office
- Hybrid work is here to stay
- Make offices fun to draw employees back – no longer a “warehouse for employees in cubicles”. People want to come in for collaboration, company culture, team lunches and not simply sitting in a cubicle. More amenities!
- Variables and concerns to growth of Downtown Bellevue:
o Transportation Infrastructure
o Business friendly city council must continue
- Pandemic cleared out weak retail & more online shopping than ever (20% this year, up from 12% in 2018)
- 77% of Gen Z prefers physical store– retail is here to stay but must be exciting
- Retail is the energy of downtown areas. It is also required for tax revenue for cities.
How will people get to Downtown Bellevue?
o Public transportation levels extremely low since the pandemic
o Driving is the only mode of transportation back to near-normal levels
o Ride share has caused a lot of congestion (drivers circling, etc)
o Car share, bike share, transportation hubs, more EV charging, autonomous vehicles as early as 2030
- Pandemic has forced everyone to rethink public spaces. Downtown areas must be beautiful and exciting and offer arts and culture to draw people in
- Downtown areas must be
Safe and clean
We are fortunate to live in such a thriving part of the United States. If you have any questions about real estate, please consider me a resource. Thank you.