A local developer has submitted an application to build two residential towers downtown, and an Iowa-based real estate company bought two office towers in the Bravern building last week.
The two events don’t signal a return to robust times for development, but activity is beginning to pick up downtown, which has sat quiet through the economic recession.
Su Development last week turned in an application to the city to build two residential towers with lower floor retail shops on the 200 block of 106th Avenue Northeast. The project, Soma Towers, is the first proposed high-rise development downtown since the recession began.
Apartments would range in size from 400 to 1,200 square feet, and would be priced for a range of incomes, according to a checklist Su submitted to the city last month.
Two office towers in the Bravern building, which are leased to Microsoft, were sold to Iowa-based Principal Real Estate Investors for $410 million.
Schnitzer West LLC, owner of the towers, closed the sale on Sept. 30 as a conclusion to a 10-year investment in the office towers, Senior Investment Director Tom Woodworth said.
Included in the sale is a seven-level parking garage.
Paula Chizek, spokeswoman for Principal Real Estate, said the company has owned properties in the area for more than 25 years. She said the building was appealing to the company both because of the growing nature of the Bellevue market and the clients already in the building.
“The current lease agreement made it a very attractive investment,” she said.
Woodworth said Schnitzer will stay on as owners of the 300,000 square feet of retail shops and 455 residential units. Additionally, Schnitzer will work as property managers for the office space.
These two events are a bit out of the norm for what downtown Bellevue has seen since the economic downturn. Previous to the recession, the city was saturated with applications to build downtown, but things have since dried up.
“Before the recession we were experiencing development activity far and above anything the city has seen in the past,” Brennan said.
Major projects downtown have slowed, but development activity hasn’t died out with the recession.
Mike Schreck, senior vice president of Colliers International, said the primary changes occurring downtown are tenants moving from offices throughout town into central downtown locations. Most of these clients are technology and gaming companies, Schreck said.
Brennan said applications for single-family homes are rising much faster than larger developments, but demand for apartment complexes is increasing. That may be the next step in the resurgence in development, he said.
Those hoping for a quick and obvious recovery are going to be disappointed, but things are improving, just slower than expected, Schreck and Brennan said.
“I think we’re just seeing slow growth, and that’s OK,” Schreck said. “It’s better than flat, and better than people giving back space.”
As to when development will return to pre-recession levels, that’s anyone’s guess. Brennan believes it will take a few years at minimum, but things could recover sooner.
“It may be 2012-13 before we really start to see other developments like office and multi-family show new life again, so it’s going to be a couple more years likely,” Brennan said. “That said, things change very rapidly.”
Nat Levy can be reached at 425-453-4290.
