Lincoln Square

By late 2000, the Internet bubble was well on its way toward imploding and the local commercial real estate market was showing signs it would soon follow.

“In 2001, everything started off more optimistically than it ended,” said Maria Royer, senior vice president and managing broker for Blatteis Realty Corp.

But even with the retail and general economic slump, Royer said she remains bullish on the long term. She signed Abercrombie and Fitch in downtown Seattle in early 2001, and filled the remodeled convention center and Elliott Hotel’s 25,000 square feet of retail with retailers such as Starbucks, Cheesecake Factory and Flora & Henri.

Her biggest deal in 2001 involved Bellevue’s Lincoln Square, which will have 330,000 square feet of retail — roughly the size of Pacific Place. Handling all the retail leasing in Lincoln Square, Blatteis has so far signed Pacific Theater’s ArcLight high-end theater for 77,000 square feet. She predicts the now under-construction development will be 65 percent leased by the second quarter of this year.

Retail activity in downtown Seattle has markedly slowed down, Royer said, largely due to a downturn in tourism associated with Sept. 11. Yet there is reason for optimism, and Seattle is still seen as a desirable location.

“We still have no supply,” said Royer, referring to retail space. “We still have a pent-up demand.” The long-term prospects for the retail core will remain stable because we have a very limited supply of product. One space she’s looking to fill is the former Planet Hollywood restaurant.

We won’t see the good old days of late 1990s retail expansion, she added. Same-store sales will likely return to normal. “We had some wild, double-digit increases,” she said referring to the late-90s. “Now there’s a feeling that we’re getting back to normal in same store sales, in the 2 percent to 4 percent range.”

Riding out the recession is the key. “People are bullish on the long term. In general, I’m hearing that the recovery will be later this year.”