February 21, 2019

PCL to build Avenue Bellevue towers; future phases planned on larger site

Renderings by Fortress Development/Weber Thompson [enlarge]

The main entrance, essentially a woonerf, will face Eighth Street. A skybridge will connect the southeast tower to the retail building.

Details have been gradually emerging for Avenue Bellevue, the two luxury residential towers planned on about 2.7 acres at 10300 N.E. Eighth St. in Bellevue.

Formerly home to Cost Plus World Market, the midblock site is north across Eighth from Bellevue Square.

Last week Andy Lakha's Fortress Development showed polished renderings for the southeast tower, which will have a hotel and condominiums, plus a retail plaza. Yesterday at the press launch, fresh details were shared.

PCL will build the roughly 1.2 million-square-foot project (that includes the parking). Demolition of the existing retail, plus excavation for the parking garage will begin this summer.

Fortress is pursuing phased permits, which are well advanced with the city. Completion is expected by mid 2022, with residential occupancy late that year.

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Call that Phase I.

Fortress executives also disclosed that Phase II, likely a third condo tower (or hotel-condo hybrid), will go on the property immediately west of Phase I. That's generally called the Stanton assemblage, for the telcom magnate and investor John Stanton, who over the past dozen-odd years acquired 27,700 square feet of low-rise retail.

That site sold last September for $19 million to an opaque LLC. Fortress was then rumored to be the buyer, and it was, with Goldman Sachs the lender. With the same lender, Fortress previously paid $44 million for the main Avenue Bellevue site.

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Back to Phase I: The 26-story southeast tower will have 98 large condominiums atop an InterContinental Hotel with 252 rooms. The 25-story northwest tower will have about 232 condos with smaller floorplans. Both will be built in tandem, with PCL pouring alternating concrete floors in the two towers — letting one dry while the other is underway.

Fortress will own the parking, retail and hotel. The InterContinental will operated by Benchmark, which is based near Houston and has a Seattle office. It operates other hotels and resorts in this region.

About 85,000 square feet of retail and commercial space will be in the low-rise podium structures and two towers. The southeast tower will feature a new Angler restaurant from three-Michelin-star chef Joshua Skenes, who has built an acclaimed group of restaurants in the Bay Area. The northwest tower will have some kind of food market or deli.

Condo sales are beginning this month, with a sales center and two-bedroom model unit at Lincoln Square South. (See liveatavenue.com for appointments.)

Another sales center will open near the project site this fall, when Lakha expects to name financial partners and unveil the final design for the northwest tower.

Weber Thompson is the design architect for both, and CollinsWoerman is the architect of record.

[enlarge]

Two luxury towers with condos, a hotel and retail are planned on about 2.7 acres across from Bellevue Square.

PCL and Fortress also revealed that the parking garage may be reduced in depth from four to three levels. This would shorten the construction schedule by a few months, and lower costs. But the number of stalls, about 800-plus, wouldn't be dramatically trimmed. Instead, a system of valet and automated parking could pack and stack vehicles more efficiently.

The main entrance, essentially a woonerf, will face Eighth. A skybridge over it will connect the southeast tower to the three-story west retail building.

The two towers will eventually carry separate addresses. As will the equal-sized tower of Phase II. (The whole block has the same new zoning.) No plans have been filed there yet.

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Then, get ready for it, there could be a Phase III with a fourth tower. Lakha and his team were cagey about the details and negotiations with the family that has long owned 32,000-square-foot southwest corner of the block. It's now home to a Starbucks and other retail with leases that extend for several more years.

But talks are ongoing. Arne Hall of Fortress said, “That property needs to be integrated with Andy's.” In the meantime, “We're looking at capital partners right now.”

This is the first condominium and high-rise project for Bellevue resident Lakha, who said, “This is my backyard. This is my dream project.”

The InterContinental will have a ballroom, apparently in the west satellite building. “This is the place where my daughter will be married,” said Lakha.

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Also on the block: The northwest corner, which traded last year for $19 million, is where 47 North Development and the Pong family are sitting on the former University Book Store and Orvis buildings, with no new plans filed. A childcare center has a reported 15-year lease in the former book store, which also has a few other tenants.

The northeast corner was developed by AvalonBay Communities a decade ago with the 23- and 13-story Avalon Towers.

The southeast corner, home to Bergman Luggage and others, has a long-term ground lease held by Kemper Development Co., so it won't be developed anytime soon.

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Lastly, among various industry figures buttonholed by the DJC, the consensus view was that Puget Sound Business Journal is correct in its unconfirmed report this week that Amazon will lease Vulcan Real Estate's two big planned office developments in Bellevue, plus Trammell Crow Co.'s two towers on the former Bellevue Cadillac property, and buy the planned 600 Bellevue tower (on a portion of the existing old Bellevue Corporate Plaza). That could total around 3.4 million square feet.

And, said some, keep an eye on Skanska's recently acquired downtown site, once part of the Washington Square assemblage, where an office tower is planned. Amazon rumors are swirling there, too. That could add another 500,000 square feet to Amazon's hypothetical total.

If, as PSBJ speculated, Bellevue is to become half of Amazon's HQ2 (along with northern Virginia), at least some of those future workers might be interested in buying condos at Avenue Bellevue.