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Updated Sunday, December 9, 2012 at 08:52 AM

Bellevue's underdeveloped downtown sites marketed for lease

By Eric Pryne
Seattle Times business reporter

Here's another sign that downtown Bellevue's commercial real-estate market is heating up:

Some of its most prominent underdeveloped properties — lots where older, one- and two-story buildings hang on, surrounded by skyscrapers — are being marketed to developers.

Probably the largest is Sterling Realty Organization's 5.5-acre assemblage at 106th Avenue Northeast and Northeast Eighth Street, where a former bowling alley and former movie theater now house a bookstore and a church.

"We're working on something, and it hasn't matured," says David Schooler, Sterling's president, declining further comment.

Brokers say the prospective deal is a ground lease with the Rockefeller Group of New York, developer of Rockefeller Center. That would give the developer a lease on the land for several decades so it can build a project; eventually the property and building would revert to the landowner.

Also offered for ground lease: an aging one-acre retail complex at Bellevue Way Northeast and Northeast Eighth, just north of Bellevue Square.

Broker Steven Wood of Century Pacific says the longtime owner, Kaylen Investment, is considering offers from several prospective tenants. Mixed-use residential and retail development seems most likely, he says.

Zoning would permit a 200-foot apartment tower.

Last month IM Plaza put its 1.3 acres across 108th Avenue Northeast from the Bellevue Transit Center up for sale. Broker Jason Rosauer of Kidder Mathews says multiple offers have been submitted, mostly by office developers.

Zoning allows a tower up to 450 feet tall. Three small buildings, two of them restaurants, now occupy the site.

Why sell now?

"It's the right time in the development cycle," Rosauer says. "The property is worth considerably more than the rents you get now."

Eric Pryne: 206-464-2231 or epryne@seattletimes.com


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