Downtown Bellevue is a retail powerhouse that has economic potential to spare. But there is still plenty to be desired when it comes to shopping and dining in the area.
That’s according to Jana Koeberle and Maria Royer, two retail experts who spoke Tuesday at the Bellevue Downtown Association breakfast at the Hyatt Regency.
Koeberle is vice president of leasing for Kemper Development Company, and Royer is a partner with industry consultant Real Retail.
Both women agreed that Bellevue could benefit from more street-level retail and boutique-style businesses – like chef-driven restaurants, for example.
The problem is that the city isn’t built for that yet.
“Small shop space is very tough to find,” Royer said. “A lot of retailers are looking for it right now – they want to be in that grocery-anchor center in downtown Bellevue – and it just really doesn’t exist.”
The exception is Old Bellevue, where independent restaurants like Bis on Main and Monsoon mix with quaint Main Street shops such as Fran’s Chocolates and Ming’s Asian Gallery.
Royer says boutique businesses gravitate toward older buildings, where rents are cheaper and there is freedom to experiment.
Bellevue, with all its new development, lacks that type of space. There is also a notable absence of big, continuous space – the likes of which national retailers look for.
The good news is that the city’s central business district is far from filled out. At around 400 acres, it’s also more than 75 percent larger than Seattle’s CBD – surprisingly enough.
That means the city is ripe with retail potential, despite its rapid growth in recent years.
“Bellevue is one of the very last great hot markets in the U.S. that is virtually untapped from an upscale and luxury perspective,” Koeberle said.
The most notable exception is The Bravern, home to Nieman Marcus, Louis Vuitton, and Jimmy Choo. But that’s also the site where Artisanal recently shuttered, despite having the draw of a big-name Manhattan chef in Terrance Brennan.
Despite any hiccups that have happened during the sluggish economic recovery, Koeberle said Bellevue’s downtown core still has the advantage of drawing from a hard-to-beat demographic.
The Eastside has an exceptionally high level of affluence, with 18 of the top 20 highest-earning zip codes in the Puget Sound region (see image below article). Seattle, on the other hand, gets most of its appeal from population density and tourists.
That’s not to say there should ever be a death match between Bellevue and its Emerald City neighbor – although the two towns have been competing recently for everything from national retailers and Microsoft offices to foreign consulates.
Royer stressed the importance of healthy business activity on both sides of Lake Washington. That’s because retailers want to know they’ll be able to launch numerous stores in any given region.
“If they come to town and don’t see options for multiple locations, it makes it harder to land the first one,” Royer said. “We need multiple areas to be healthy.”
Royer suggested landlords may need to lower their rental rates to lure the types of independent businesses that make downtown district’s attractive. She said most can’t afford the same prices as national retailers.
“If that’s what you want in your project, you really have to look at that and say it’s going to add the depth and vitality that we need, and we need to support these local retailers,” she said.
Royer also said that, for better or worse, retailers are migrating back to malls instead of snagging spots in the “lifestyle centers” that have been all the rage in recent decades. The reason is that malls have a proven track record, and merchants have little tolerance for risk-taking in the current economy.
In the short term, that means developers could second-guess their plans for mixed-use projects like The Bravern.
