April 22, 2021

Silverstein lends $700M for Avenue Bellevue

Rendering by Fortress Development [enlarge]

This view looks north at the south tower, with condos above a hotel; the entirely residential west tower is at left.

The cranes are up, and the foundation looks to be done at Avenue Bellevue, the big mixed-use development at 10300 N.E. Eighth St., on the block north of Bellevue Square. Construction began in the fall of 2019 on Phase I, which should deliver two towers with retail, 365 condominiums and a hotel by early 2023. That spans about 2.7 acres.

Now Fortress Development has announced the largest construction loan in Bellevue history: $700 million from Silverstein Capital Partners. That's a sister firm to Silverstein Properties of New York, which recently entered the Seattle market with a bang (more on that below). Fortress also said the loan is one of the largest in the U.S. since the pandemic began. It's also SCP's first construction loan on the West Coast, where Silverstein is increasingly active.

Fortress CEO and Bellevue resident Andy Lakha said in a statement, “I am proud to have Silverstein back this dream project in my own backyard; it is quintessential affirmation of the development and the hard work of many years as we continue construction and add Avenue to the skyline and fabric to the heart of downtown Bellevue.”

Silverstein's Shawn Katz said, “SCP likes being involved in large-scale mixed-use construction projects consistent with many of Silverstein Properties' developments. We believe that Avenue Bellevue will be the premier residential, hotel and retail project in an incredibly attractive market.”

Weber Thompson designed Avenue Bellevue, which is expected to have two more phases. JTM Construction is the builder. (PCL was originally announced in 2019.) The team also includes CollinsWoerman, architect of record; DCI, structural engineer; PFS Studio, landscape architect; Huang Dao, feng shui consultant; Real Retail, retail leasing; Hirsch Bedner Associates, interiors; and Rennie Marketing Systems, condo sales.

A 208-room InterContinental Hotel will share the south tower — facing Northeast Eighth Street — with the larger “estate homes” (141 in total). That'll have 26 stories, with event space, restaurants, bars, gym, spa and concierge team. The 25-story west tower will have 224 units, which Fortress dubs “residences,” with smaller floor plans and lower prices. Pre-pandemic, the announced prices were to start at $899,000. Fortress says that pre-sales have now reached about 40% of available units.

The retail and restaurant space will total about 85,000 square feet. Chef Joshua Skenes will have a still unnamed restaurant with a seafood focus. Newly announced is BUDDHAzen, developed by Hospitality Alliance and HBA, who previously helped create Buddakan, Tao and China Grill. Underground parking for all users will total about 900 stalls.

Said Lakha,” We are creating something that will set a new standard for hospitality and residential design in the region. I am deeply committed to the future success of the community — and Avenue Bellevue is the most important project of my life.”

Goldman Sachs previously loaned Fortress a significant portion of the $63 million acquisition cost for its Phase I and II sites. Phase II, west of the west tower on 102nd Avenue Northeast, could be a third tower with condos and/or apartments. What is presumed to be Phase III, on the block's southwest corner, traded last November for over $28 million to an opaque LLC that appears to be a holding vehicle. No plans have been filed there or on the Phase II site.

Phase I's opening should coincide with light rail service at Bellevue Downtown Station, about a 10-minute walk east. And Amazon is expected to grow its downtown Bellevue presence to about 25,000 workers in over 5 million square feet of offices — creating ever more demand for housing.

Over in Seattle, Silverstein last year paid $17.5 million for the Butcher's Table building in the Denny Triangle. With Handel Architects of New York, it's planning a 46-story tower with about 400 units — whether condos or apartments is still TBD. The private, family-run firm also made a big splash on the West Coast last year by paying $430 million for the US Bank Tower in Los Angeles.