July 8, 2021

Facebook claims Block 5 at Spring District

Rendering by Studio216 for Wright Runstad [enlarge]

Looking southwest, Block 6 is left (east) of Block 5. Safeway’s large white distribution building is on the far right.

Wright Runstad keeps building them, and Facebook keeps leasing them. The social media giant has pre-leased the planned 327,000-square-foot Block 5 building, where construction will begin this year at 1615 123rd Ave. N.E. in the Spring District. Wright Runstad & Co. made the announcement on Wednesday.

Thus far, Facebook has leased all the office space in the mixed-use development in East Bellevue. The company now has about 1.6 million square feet at the Spring District — including the building it owns, once slated to be REI's headquarters. Light rail service will begin there, for both office workers and apartment dwellers, in 2023 or sooner.

Broderick Group's Grant Yerke and Matt Schreck brokered the Block 5 space for Wright Runstad and partner Shorenstein Properties. Terms for the lease are unknown. Facebook was represented by Adam Brenneman and Shelley Gill of Kinzer Partners.

NBBJ designed Block 5 (along with all the other offices), and Turner Construction will build the 11-story project. The team includes UMC, mechanical and plumbing; and JMJ Team, civil engineer and planner. Completion is anticipated by 2023. Block 5 is intended to meet LEED certification. It'll have six levels of underground parking with about 574 stalls. Total project size is around 572,000 square feet, including 4,000 square feet of retail.

Like other large tech companies, Facebook is expected to shift the bulk of its workforce back into offices this fall, as the pandemic wanes. That includes Block 6, now under construction on the north side Northeast Spring Boulevard, next to the Block 5 site. Both are north of the former REI HQ — which is ready for Facebook to occupy.

Also at the Spring District, also for Facebook, Block 24 is nearing completion by Turner, which has completed Block 16. (Update: Howard S. Wright is in charge of the tenant improvements for Facebook.) Those two are on the east side of the development, along 124th Avenue Northeast.

Still in planning is Block 13, with about 198,000 square feet of offices. That'll be in the central area of the development, between the GIX Building and former REI building. No start date or possible tenant have been disclosed.

North of Block 5 and Block 6, and north of the light rail trench and station, is what Wright Runstad calls Phase III of the development. That might add another 1 million square feet of offices (aka Block 1 and Block 2), plus a possible hotel. None of that has gone into design review.

The entire 36-acre development could hit 3.3 million square feet. The site could also conceivably be enlarged, since Safeway — which in 2007 sold the main south property for $68 million — still has nearly 22 acres that are in use for distribution and offices. (It also ground leases another 3 acres.) Another huge prize would be the 20-acre Coca-Cola property to the east; it last traded four years ago for over $31 million.

On the sales side, Brookfield Asset Management has already purchased the Facebook-leased Block 24 and Block 16, for about $565 million. It also recently bought Wright Runstad's stake in the GIX Building for $85 million. (Shorenstein remains an owner there.)

Once occupied, there would be a long line of potential buyers for Block 5 and Block 6. Broderick Group's second quarter office report is quite bullish on the Eastside. Its analysts write, “The massive investments by the likes of Amazon, Facebook, Google and Microsoft are catapulting the Eastside into an elite regional tech engineering hub.”

And more, “Investment is pouring in from institutional buyers and developers seeking to tap into the flourishing Eastside market. An undercurrent of excitement and optimism is rapidly increasing throughout the community.”