Updated Wednesday, January 9, 2013 at 08:56 PM
One of the nation’s most storied names in commercial real estate has jumped into the Greater Seattle market for the first time.
The Rockefeller Group, developer of New York’s landmark Rockefeller Center, and Bellevue’s Sterling Realty Organization (SRO) said Tuesday they have an agreement to build a high-rise office complex on 5.5 acres owned by SRO in downtown Bellevue.
Development doesn’t appear to be imminent, however. According to public records the agreement, signed last month, gives Rockefeller an option to lease the site from SRO and build on it.
That option has not yet been exercised, said David Schooler, SRO’s president.
In their statement, Rockefeller and SRO indicated the complex would be built in phases “to allow for demand-driven development.” That suggests construction won’t start without a signed tenant.
Most of the site, at 106th Avenue Northeast and Northeast Eighth Street, has been owned by SRO since the 1950s. It’s now occupied by several older, mostly retail buildings.
The two largest structures, a former bowling alley and former movie theater, now house a Barnes & Noble bookstore and Mars Hill Church branch, respectively.
Rockefeller and SRO said initial plans call for three office towers, to be built above a common “podium” with retail and public space.
At 2.4 million square feet, the complex would be downtown Bellevue’s largest since the retail/office/residential/ Bravern project, completed in 2010.
For comparison, Amazon.com’s proposed three-tower office campus in Seattle’s Denny Triangle is about 3.3 million square feet.
Under some circumstances, Bellevue zoning could allow an office tower as tall as 450 feet on the SRO site, said Sally Nichols, an associate planner for the city.
Rockefeller has not yet contacted Bellevue officials, she said.
The New York company and SRO filed a document with King County indicating Rockefeller’s option could terminate in anywhere from 18 months to nine years, depending on the company’s actions — but could end sooner or be extended longer under certain circumstances.
The agreement also gives Rockefeller first right to buy the site outright, the document says.
The office market’s recovery prompted SRO to seek a development partner, Schooler said: “Land values had been going up during the decade of the 2000s and crashed, and they seem to be coming back.
“It just seemed to be a good time to take a crack at it.”
Rockefeller first approached SRO through a broker about 18 months ago, Schooler said. “I was surprised; their reputation is fabulous.”
Rockefeller Group Development owns or manages 10 million square feet of Manhattan office space, according to its website. The company also has projects in nine other states and Washington, D.C., as well as in China.
In Bellevue, Rockefeller would have to compete with at least four other developers seeking anchor tenants for proposed office buildings, said broker Paul Sweeney of the Broderick Group.
But it’s a prime site, he added, adjacent to the east-west pedestrian corridor that links the shops and restaurants of Bellevue Square and Lincoln Square with the Bellevue Transit Center and its future light-rail station.
Bellevue Downtown Association President Patrick Bannon agreed. “Given its scale and location, [Rockefeller’s] project will play a significant role in shaping the future of downtown,” he said.
Sterling Realty, owned mostly by the Danz family, is the successor of Sterling Recreation Organization, which built and operated movie theaters, bowling alleys and radio stations for decades. Many of its properties are former theater sites.
It still owns the ground under the Symetra Financial Center and Key Center office towers adjacent to the Bellevue property on which Rockefeller has an option, Schooler said.
Developers are showing renewed interest in downtown Bellevue, in part because its office-vacancy rate is among the region’s lowest.
At least three office towers, totaling about 1.5 million square feet, could start construction this year. Five residential projects with more than 1,100 units also are expected to break ground.
“”Bellevue has become a dynamic ‘24-7’ city — the type of vibrant urban environment on which our company has always focused when seeking office development and investment opportunities,” Kevin Hackett, Rockefeller’s president and CEO, said in a statement.
Eric Pryne: firstname.lastname@example.org