Notes from “Downtown Talks” event this morning – Future of Downtown Bellevue

Posted on March 29th, 2022

Notes from “Downtown Talks” event this morning – Future of Downtown Bellevue

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   Affordability

    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.

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