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Real Estate Editor
February 28, 2019
The news last week about Avenue Bellevue — the condo/hotel project planned north of Bellevue Square — was that Fortress Development was expanding the site and adding future phases, and that PCL Construction will build Phase I.
But did I mention the snacks? They were excellent. And so were the views.
Last week's swelligant press launch took place high up in the south office tower at Lincoln Square. (Fortress only rents there, and there's no connection with Kemper Development Co.)
Looking down from the sales center, one could see the site where Cost Plus World Market and other low-rise retail will give way to Avenue Bellevue's two towers, one of which will include an InterContinental Hotel on its lower floors.
Looking east from the luxurious corner two-bedroom model unit, you could see some of Fortresses' future competitors — meaning parking lots and other old low-rise commercial properties bound for condo development. (For now, we'll ignore the future office towers and Amazon rumors.)
Thus the old bowling alley — now Barnes & Noble — and former John Danz Theatre, sold this month to Onni Group for $116 million. Three high rises are planned on the site, with offices, hotel rooms and probably condos. (Or some combo of apartments and condos; Onni hasn't said.)
And north of that site, facing Northeast Eighth Street, is Bosa Development's $35 million strip-mall parcel, where no plans have been filed. Condos are likely there, too, but Bosa is busy with condo projects in Seattle and Bellevue, where its 21-story, 143-unit One88 is essentially sold out and due for completion next year.
Avenue Bellevue's first two towers will break ground this summer, with about 330 condos that are set to open by mid 2022. This will likely be downtown Bellevue's next big condo project to arrive, though Create World's 150-unit Mira Phase II may get to market sooner — and probably at a lower price point.
There will be 98 larger “estate homes” in the southeast tower — above the hotel. Prices will start at about $1 million for a one-bedroom, $2 million for a two-bedroom and $3.9 million for a three-bedroom. (See liveatavenue.com to make an appointment at the sales center.)
There will be more and smaller units in the northwest tower, and those prices will be announced this fall. Condos will average 1,500 square feet in the southeast tower, and 800 square feet in the northwest tower. A separate sales office for the northwest tower will open this fall near the jobsite.
“There really isn't a five-star living opportunity over in Bellevue,” said Bob Rennie, whose Rennie Marketing Systems is leading the sales effort. Having previously worked on the Four Seasons hotel/condo hybrid in Seattle, he noted how the similar in-house services in the southeast tower would appeal to affluent owners and “some of our seniors who will buy here.” Some of those buyers may be done with cooking and prefer to dine at the Angler restaurant from three-Michelin-star chef Joshua Skenes, who also spoke briefly.
Also, a deli or some kind of market is planned in the northwest tower. So there's no need to schlep to Safeway. Related: Why is there no PCC or Whole Foods in downtown Bellevue? The QFC may go away when Pinnacle International Group develops that $145 million, 11-acre site it recently acquired. Or does everyone — wealthy retirees and millennials both — simply have their groceries delivered these days?
Avenue Bellevue's target condo buyer is a “high net-worth individual,” unsurprisingly. “Some are going to downsize from their houses in Medina,” said Fortress CEO Andy Lakha. “Some internationals also.”
Rennie's estimate is that only 5 to 10 percent of buyers will have kids, so Avenue won't be specifically marketed as a child-friendly project. “It's probably more grandchildren-friendly,” he laughed.
The marketing mantra “a city within a city” was invoked by all.
Leasing the retail space is Maria Royer of Real Retail, who said of future residents, “They want walkability. They want the European streetscape experience.”
Most of the 85,000 square feet of retail will be concentrated along Avenue Bellevue's entry drive — almost a woonerf — at 10300 N.E. Eighth St. That axis will point directly south to Bellevue Square, and connect later to Phase II and Phase III of Avenue Bellevue.
No future tenants have been announced for that commercial high street, but will it really resemble the retail rambles of Zurich or Lisbon? The idea would've seemed farcical back when Bellevue Square was an open-air mall with humble tenants like the Kandy Kane and Frederick & Nelson, and the city was completely dependent on driving, cheap gasoline and free parking.
But today, with the future light rail station a short walk east from Avenue Bellevue (and Bellevue Square), Rennie's notion that an owner would “never see your parking stall again” doesn't seem so crazy.
“People don't really need to drive,” Lakha chimed in.
Though I thought it odd that no one even mentioned light rail service, which will begin in 2023. Even affluent buyers, headed to a Seahawks game or Benaroya Hall, might prefer transit to being stuck on 520 in their Bentleys and Jags.
Lakha did say that talks are underway with the city about making the pedestrian experience safer and more friendly to future residents. “Northeast Eighth is really not walkable right now,” he said.
If Kemper Freeman's solution is skybridges over Bellevue Way, might midblock crosswalks be so unthinkable? Or is that creeping socialism? Again, Bellevue is changing.
To date, Fortress has paid about $63 million for the Phase I and Phase II sites, with Goldman Sachs as its lender. A new financial partner, or partners, should be named this fall.
Weber Thompson is the design architect for Avenue Bellevue, and CollinsWoerman is the architect of record.
When completed, Avenue Bellevue will be Lakha's largest and grandest project to date, “something my city will be proud of.” It'll also be his first project in Bellevue, first high rise, and first foray into the rebounding condo market. Most of his past portfolio has been retail and shopping centers, with one apartment project in Texas, he said.
In selecting PCL, said Arne Hall of Fortress, “You have the kind of contractor who has condo experience.” Aaron Wiehe of PCL said that his firm will also build Mira Phase II, likely starting this fall, and the Koda in the International District. He also cited high-rise apartments that have been built to condo standards, for possible future conversion, including Cielo, Tower 12 and the just-opened Arrive (pretend there's an accent mark on the e).
“We're seeing a lot of condos,” Wiehe said of the market in general. “It's all kind of switching.”
At Avenue Bellevue, Wiehe estimates that 350 to 400 workers will be employed on the 2.7-acre site. The two towers, with crews alternating between them, will have 25 and 26 stories. “The garage is massive.” It'll have 900-plus stalls on three or four underground levels, depending on whether an automated valet parking system is used. (Shoppers and hotel guests will use a different, lower level of the garage.)
So if future owners become so enchanted with the newly walkable, European streetscape of downtown Bellevue, how will they even remember where their dusty Teslas are parked? Rest assured, there's an app for that.
Got a tip? Contact DJC real estate reporter Brian Miller at firstname.lastname@example.org or call him at (206) 219-6517.