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July 20, 2018

Skanska pays $33M for Bellevue site; high-rise offices planned

Journal Staff Reporter

Skanska USA has paid $33 million for strip mall properties at 10630-10660 N.E. Eighth St. in downtown Bellevue.

King County recorded the sale on Thursday. The seller was BV Holdings of Utah, which acquired the property in 2002 as part of a larger deal worth $11.5 million.

The buyer was SCD NE 8th LLC, which is associated with Skanska.

The deal was worth about $428 per square foot for the land. Brokers were not announced.

The Corner Court retail complex was developed on about 1.7 acres in the 1950s and 1970s, and is home to Rise Coffee Lounge, Ishoni Yakiniku restaurant, What the Pho, a nail shop, jeweler and several other retailers.

It is on the northwest corner of Eighth and 108th Avenue Northeast.

Skanska confirmed the sale with a press release, and said it plans to develop an office tower with approximately 500,000 square feet, and local retail on the ground floor.

Skanska and BV Holdings also signed an indemnity agreement for soil contamination associated with an old dry cleaner on the property.

The possible height and architect for the Class A office tower weren't specified.

Skanska's Murphy McCullough said in a statement, “The Bellevue commercial office market is incredibly dynamic with a diverse set of industry leading tenants fueling the Eastside's growth. Given favorable market dynamics, our team is eager to move this project forward quickly.

“Similar to other projects Skanska developed in the area, we will have a particular focus on creating a wholly unique ground-floor experience in this location.”

The property that sold is part of a 9-acre superblock assembled and owned by Eugene Horbach in the early 2000s. The superblock was generally known as Washington Square. Development there was slowed by the recession, and various portions were sold to other developers and investors, including BV Holdings.

BV Holdings is related to Wasatch Development Associates, whose development plans for Washington Square included five condominium towers, as well as other uses. Two towers with 349 condos were built. Also on the same block, Trammell Crow developed its 929 Office Tower at 929 108th in 2015.

At one time, post-recession, Touchstone was associated with Washington Square, but opted not to join the project.

Skanska recently sold 400 Fairview in Seattle for $338 million. It's currently building the 2+U high-rise office tower in Seattle, with no tenants announced, and also plans a 29-story residential tower at 2208 Fourth Ave. in Belltown.

Skanska said the Bellevue investment represents its sixth development project in the Puget Sound region, and its second project in Bellevue since it began development operations in 2011.

Alley 111 was Skanska's first Bellevue project: a 12-story, 260-unit apartment building at 11011 N.E. Ninth St. with retail space.