By BILL NEIL Kidder Mathews & Segner

"The Technology Corridor" was a term coined by Roger Belanich, Quadrant, Harbour Pointe Partnership, and the Koll Co., in 1984 to market office and flex-tech space to companies searching for space on the Eastside, primarily for Northend locations along the Interstate 405 corridor.

I doubt any of these visionaries, even in their wildest expectations, would have envisioned what we have today. That is a healthy technology corridor that extends from Renton to South Paine Field. It includes Class A office space in downtown Bellevue, suburban office and flex-tech developments, and, increasingly, rehabbed office/distribution facilities, such as Teledesic in Bellevue and the former Brooks Shoe Building in North Creek.

To say that the market is "on fire" is an understatement. Let’s review some facts and figures:

• As of Jan. 1, the East King County office market, which is comprised of 23.6 million square feet, had a vacancy rate of only just over 3 percent.
• Absorption in 1999 amounted to an astonishing 2 million square feet. This, historically, had averaged 600,000 square feet.
• There are 3.8 million square feet currently under construction. (Construction is occurring in all sectors, including the Bellevue central business district, suburban office, business parks, and infill office buildings being constructed on previously disregarded sites.)

The composition of our Eastside market has changed considerably since the mid-1980s when developers came up with their "Technology Corridor" marketing ploy. Yes, widgets and gizmos are still designed and manufactured locally. And there still is a professional service sector of law, brokerage, accounting, engineering, and public relations firms, with a presence in Bellevue’s CBD. But the type of tenant mix occupying and searching for office space has changed.

There used to be a dramatic office environment distinction between users of space. As our tenant base increasingly changes to intellectual property development, the office infrastructure requirements of these space users parallel those of more generic office tenants. The new Class A office projects that are under construction in Bellevue’s CBD will largely be occupied with dot-com firms. Of course, there will still be generic office space tenants, but this first phase of new CBD construction will see more technology tenants than other space users.

Lincoln Square, Three Bellevue Center, and Civica Office Commons specifically tailored their infrastructure core and shell design to accommodate the needs of this emerging cadre of technology space user. Other new projects currently being designed or in for permit by the likes of Bentall, Horbach, Spieker and others will also appeal to these high-tech space users, in addition to stock and standard office tenants.

The tremendous amount of apartment, condo, and retail amenity construction being undertaken in downtown Bellevue, in addition to the strong demand for space and booming economy, has precipitated this new wave of development in the CBD.

Employees can walk to work, eat at a myriad of restaurants, shop for anything they’d ever want to buy, and even quaff a beer or two after work without ever having to get into their cars. Technology firms are increasingly choosing the amenity-laden Bellevue CBD for strategic purposes in recruiting employees.

This is distinctly different from the Bellevue I encountered when I moved there from out-of-state 10 years ago. It is not only the Bellevue CBD area of the "Technology Corridor" that is benefiting from our area’s newly hatched intellectual property, wireless communications, medical, software, dot-com, engineering services, etc., economy. Suburban office parks and Class A office developments stretching from Issaquah on Interstate 90 to Canyon Park along Interstate 405 in Bothell have all benefited from the Eastside’s strong market position.

It appears that the "if you build it, they will come" philosophy is running true to form. Virtually all space speculatively constructed, planned for, or entitled has been leased or has several offers being entertained. This trend will continue until all the close-in, available and entitled land has been developed. New developments such as Redmond Ridge Business Park to be developed by Quadrant, and the possible rehab of existing, older buildings or office parks will handle future Eastside office user needs, but if a company needs space at any time in the next 12 months, watch out and plan ahead.

To summarize, "These are the best of times and the worst of times," depending on which side of the table you are sitting. Landlords are getting proforma rents (maybe more), preleased buildings and mitigating risk. If you are a tenant, gone forever are the days of multiple months of free rent, turn-key improvements regardless of landlord cost, firm options to take down additional space, and a security deposit equal to last month’s rent!

In this market, both landlord and tenant must understand each other’s needs and mutually work toward a win-win situation. In the cyclical world of commercial real estate, each side must be cognizant of, and respect, the other’s contribution to each other’s success. A landlord expects to get his or her return and be in a reasonably secured collateral position for the monies expended to do the deal, and a tenant expects a market deal from a landlord who treats him as a strategic business partner.