October 9, 2023

Redmond business park could flip to 500 units … then maybe more?

If the initial plan proceeds, on the south end of the park, Link would still have some 12 acres to possibly redevelop.

In a July deal last year, not widely reported in our market, Blackstone acquired a national portfolio of business parks for about $7.6 billion. Over in Redmond, that included the 1970s-era Overlake Business Center, with at least 371,000 square feet in around two dozen low-rise buildings. It spans about 15 acres, and is home to many small tenants.

The complex, south of state Route 520 and near the future Overlake Village Station, now operates under Blackstone's Link Parks platform.

Early last month, Link and architect GGLO filed a preliminary plan to redevelop about 2.5 acres at 2425 152nd Ave. N.E. That could yield about 500 apartments in an eight-story building (or buildings), with retail and parking to be both structured and below-grade.

The plan hasn't yet entered design review with the city of Redmond, which recently began evaluating the project.

The park has north and south components, and the north end is right next to the future station (set to open in 2025, probably). The city calls the new plan Overlake South Block V. It will apparently replace two old buildings north of the KeyBank and Qdoba on Northeast 24th Street.

The team also includes Coughlin Porter Lundeen. The effort is led by a Link executive with prior multifamily experience with Equity Residential. While Link Logistics is well familiar in our market, Link hasn't previously been known as a multifamily developer.

Blackstone does often enter joint ventures with apartment specialists including, in our market, Security Properties. The investment giant has its fingers in all sectors of real estate.

Given the entire park's vintage, new zoning, and valuable proximity to light rail, it wouldn't be surprising if more phased redevelopment to residential and mixed-use did follow.

That station area is being rapidly transformed into an urban village by developers also including Seritage (the Sears spinoff REIT), Capstone Partners and Merlone Geier Partners. Hundreds upon hundreds of new residents will be using light rail there, and shopping and dining, in coming years.

Blackstone made the business park purchase via an LLC in 2022, with the seller then being PS Business Park, an arm of Public Storage. The latter acquired the park in 2007 for about $75.7 million from a partnership led by the Yett family. That LP acquired the park in 1994 from original developer Koll. Various Yett companies were then active in construction and development here and in Hawaii.