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Things are looking up for owners of commercial office space in downtown Bellevue, though the submarket has a long way to get back to the halcyon days before the pandemic.
That's according to commercial real estate company Broderick Group's newly released third quarter report, which states TikTok parent company ByteDance is subleasing another 66,000 square feet in the Key Center tower through the end of 2025. Earlier, Beijing-based ByteDance sublet 44,000 square feet in the tower from SAP Concur.
ByteDance has not yet responded to the Business Journal's request seeking confirmation.
"Over the last 60 days, the Eastside has experienced an eruption of tenant demand, focused primarily in the Bellevue CBD," states the report. There are over 20 tenant requirements from tenants seeking a full floor or more.
The requirements range from renewals, to existing Bellevue tenant expansions, to relocations from Seattle and new tenants moving in from out of state. All this follows nearly two years of tepid demand.
Despite this, the total amount of Eastside space available through either direct deals with building owners or subleases is a whopping 24.6%. That's nearly 17 percentage points higher than five years ago.
"It will take consistent expansion and new tenant demand to keep a lid on rising vacancy rates and shore up slumping economics as the market works through levels of supply never seen," states the report, which added that no notable Eastside deals are pending outside of downtown Bellevue
While Amazon, Google and Meta and others have pivoted from remote work policies to hybrid models, the Eastside's largest occupier of office space, Microsoft has decommissioned nearly all of its Bellevue leased projects and retreated to its renovated Redmond headquarters campus.
Broderick reports that in a cost-cutting move, Microsoft is vacating an astounding 2.7 million square feet in Bellevue in the central business district and the I-90 quarter. An additional 600,000 square feet is being marketed for sublease in East Redmond, predominantly at Millennium Corporate Park.
A new downtown Bellevue tower, Skanska's 25-story The Eight, is nearing completion. Among new buildings, The Eight is closest to announcing signed leases in the next quarter, Broderick reports.
Tasting Room Sales 2022
| Rank | Prior Rank | Business name |
|---|---|---|
1 | 1 | Woodinville Whiskey Co. |
2 | 2 | HDC Waterfront |
3 | 3 | Pursuit Distilling Co. |
