Downtown Bellevue office market flourishing

Developer Kemper Freeman took hold of a pair of scissors adorned with gold ribbon Thursday and ceremoniously marked the opening of a 28-story office tower at Lincoln Square, delivering the first of four new office projects planned for downtown Bellevue. About 200 people attended the ribbon-cutting, adding to the upbeat mood already felt throughout downtown's development community. Retailer Eddie Bauer will move its headquarters there from Redmond, and Microsoft will take the tower's top 15 floors "It's happy-dance time," Leslie Lloyd, president of the Bellevue Downtown Association, said during a subsequent ground-breaking ceremony at the Hyatt Regency Bellevue, where Freeman plans a second tower with 351 additional rooms, bringing its total to 733. "As they say, it's all good." A day earlier, online travel agency Expedia said it will move its headquarters from the Interstate 90 corridor in Bellevue's Factoria neighborhood to another tower being built downtown. With Redmond-based Microsoft expected to take two more buildings under construction at the Bravern Office Commons, downtown Bellevue is now left with just one office project that has unleased space: 26-story City Center Plaza . . . Also, rents are up as real-estate investors from outside the Seattle area pay top dollar for office buildings. In April, Boston-based Beacon Capital Partners paid the Blackstone Group of New York between $360 and $395 a square foot for some of the area's most prestigious office buildings, including the 76-story Columbia Center in downtown Seattle. "They have to raise rents, and probably a lot quicker than most tenants were in a position to absorb," to justify the prices they paid for buildings, said Charlie Hampton, a broker with Grubb & Ellis in downtown Seattle. "Everyone is buying to make a profit." Grubb & Ellis released a report last week showing that asking annual rental rates for premium office space are up 17 percent in Seattle's central business district and 28 percent in downtown Bellevue.
Hampton said he's advising businesses looking for more office space to consider making do with what they have.