Vulcan buys a big property in downtown Bellevue

Courtesy of the Puget Sound Business Journal, May 12, 2016 | Marc Stiles, Staff Writer

Vulcan Real Estate on Tuesday paid $45.35 million for its first-ever property in downtown Bellevue – a 1960s-era retail complex that is ripe for redevelopment.

The property at 117 106th Ave. N.E., is called Bellevue Plaza, and it’s surrounded by around three acres of parking. Vulcan officials said they have no immediate redevelopment plan but aim to come up with one. It will likely include building new housing and retail space, according to the company. In the meantime, Vulcan plans to fill up the 60,000-square-foot building that is a quarter vacant.

The acquisition offers more insight into Vulcan’s emerging real estate strategy. Known for leading the redevelopment of Seattle’s South Lake Union neighborhood, Vulcan in recent years has sold more than $2.9 billion worth of assets with plans to invest the proceeds in development projects and existing buildings in the Puget Sound region.

Unlike Vulcan’s most recent acquisitions – development sites in the untested markets of Yesler Terrace and the Central District, both in Seattle – this one is more conventional. Bellevue’s median household income is around $88,100. In downtown, apartment developers are building around 1,050 units, and the $1.2 billion expansion of Bellevue Square/Lincoln Square is ongoing.

Vulcan Vice President Ada M. Healey said in a press release that the company decided to buy the property because downtown is home to a growing number of people and companies. She added the acquisition aligns with the company’s strategy of buying urban infill properties that can be upgraded.

Public records show that an affiliate of a large apartment company, Highlands Ranch, Colorado-based UDR (NYSE: UDR), sold Bellevue Plaza to Vulcan. UDR, which owns the Elements, the Ashton and other large buildings in Bellevue, had acquired Bellevue Plaza for nearly $31.5 million 10 years ago.

Vulcan has hired a Bellevue company, Wallace Properties, to fill up Bellevue Plaza with more retail tenants. Brokers Jon Hallgrimson, Frank Bosl and Eli Hanacek of CBRE (NYSE: CBG) put the sale of the property together.

Marc Stiles covers real estate for the Puget Sound Business Journal.