Amazon’s decision to pursue development of a 43-story office tower in Bellevue, along with its already numerous office-property leases in the city, is likely driven, in part, by the increasingly tight office-leasing market on the Eastside, where vacancy rates contracted further in the second quarter, a report by real estate services firm Colliers International shows.
News broke yesterday of Amazon’s plan to develop a 43-story office tower at 600 108th Ave. N.E. in Bellevue, near the planned East Link light rail station under construction nearby. City of Bellevue planning manager Sally Nichols confirms that Amazon met with city officials on Tuesday this week as part of a pre-application review conference on its proposed office tower, adding that plans at this point are very preliminary and that the entire design-review process takes a minimum of nine months to a year.
The demand for office space in Seattle and the Eastside submarkets is being driven by tech giants like Amazon, Colliers notes in a recent market assessment. A total of 1.9 million square feet of office space was absorbed in the region in the second quarter.
“Apple signed the largest lease of the quarter and year so far [in Seattle], claiming the entire [620,000-square-foot] 333 Dexter development in Lake Union, where it will house an additional 2,000 new jobs,” the Colliers report states. “Amazon, which lists more than 10,000 regional job openings, continued to dominate headlines on the Eastside after leasing all 715,000 SF of Trammell Crow’s proposed Binary Towers in the Bellevue central business district.”
The Bellevue office vacancy rate dipped from 5.3% to 5.2% as of the end of the second quarter, and “is expected to decrease at a higher clip the remainder of the year as larger tenants are scheduled to move in,” according to Colliers. Seattle’s office vacancy rate as of the second-quarter end was 6.6%, down from 7.5%, Colliers analysis shows.
Among the unknowns at this point with respect to “larger tenants” is who will be leasing the planned 42-story office tower at 555 108th Ave. N.E., essentially located across the street from the planned 43-story Amazon office tower. Media reports have indicated Amazon might be a possible tenant for that building as well.
That project, being developed by Vulcan, is currently under design review, said Nichols, who added that she could not comment on whether the planned building has landed a major tenant. Luis Adan, senior development manager at Vulcan Real Estate, who is listed in city records as a contact for the project, was not immediately available for comment.