It’s hard to believe that Vulcan Real Estate, the development company started by the late philanthropist and entrepreneur Paul Allen, only recently made its first moves into Eastside commercial real estate.
After all, Allen, who died in October 2018 at age 65 due to complications of non-Hodgkin’s lymphoma, was familiar with the Eastside. He co-founded Microsoft in Redmond, and owned a home on Mercer Island.
Still, much of Vulcan Real Estate’s development focus was centered on Seattle’s South Lake Union Neighborhood that was developed into a hub for Amazon and life sciences companies.
“Bellevue and the Eastside were on our radar for many years,” explained Scott Matthews, Vulcan Real Estate’s senior director of acquisitions and residential development. “It wasn’t as though we didn’t value Bellevue as an opportunity. It’s just that we had some really interesting and compelling things to focus on. Our commitments in South Lake Union kept us really busy. A lot of times, it’s just about timing.”
For Vulcan Real Estate, the right timing crystallized a few years ago, when it spent $71.35 million between 2016 and 2017 to acquire two large parcels in downtown Bellevue, according to information available on the King County Assessor’s website.
In 2017, the City of Bellevue’s Downtown Livability Initiative allowed for taller buildings — up to 600 feet, 150 feet higher than the original allowance — and aimed to encourage developers such as Vulcan Real Estate to move forward on projects that would increase density in the city’s central business district.
The first property, located at 555 108th Ave. N.E., will be the site of a 42-story, 600-foot-tall tower that will include 1 million square feet of office space, and 27,400 square feet of retail space. That project is scheduled to be completed in 2023.
The second property, located at 117 106th Ave. N.E. (known as Bellevue Plaza), will be the site of three towers ranging from 15 to 17 stories and offering 1.05 million square feet of office space, and 35,000 square feet of retail space. That project is scheduled to be completed in 2022.
“We are excited about these two opportunities,” Matthews said. “In total, these two projects represent over 2 million square feet of office and retail space in prime central business district locations on or near future light rail stations.”
Matthews recently discussed Vulcan Real Estate’s plans for downtown Bellevue, the company’s growing interest in developing projects on the Eastside, and how Allen’s legacy still influences the company today.
Q: How much was Paul Allen involved in day-to-day operations at Vulcan Real Estate, and the development of these projects in Bellevue?
A: Paul had a great deal of visibility into the real estate effort, and particularly in our push into Bellevue. For a long time, he had an interest in expanding into Bellevue and for us to come out and see opportunities there. Bellevue was an area that Paul looked at where he felt like the table was being set and it was poised for new growth. I think he felt Bellevue was primed. He encouraged us very much to come over and look around. Sometimes, he’d drive by and point at a piece of property. Of course, we would immediately research that.
Q: What is Vulcan Real Estate’s interest in downtown Bellevue? Why move forward on these projects now?
A: Several years ago, we developed a thesis that the growing population of knowledge workers in Seattle would begin to form families and start to seek out school and housing options in the Eastside market. Bellevue was the logical place to start.
Over the years, we pursued several options in Bellevue before we landed on our initial site, Bellevue Plaza. The original plan was to build about 800 housing units. The City of Bellevue soon completed the Downtown Livability Initiative, which wisely provided for more flexibility and options to accommodate future growth. Ultimately, we elected to take advantage of the new zoning and pursue an office project there.
Q: Amazon announced this spring it will move thousands of employees from Seattle to downtown Bellevue by 2023. Are Vulcan Real Estate’s projects just great timing? Or are they in response to what Amazon had in the pipeline?
A: We really didn’t anticipate the Amazon expansion. However, we were certainly bullish on the trajectory of the region.
We felt like whether it was Amazon or another innovative company, they would see the same benefits in Bellevue that we did — a central location with access to a freeway infrastructure, as well as light rail coming, which we think is really, really a key factor in the transformation of the Eastside market.
The amenities in Bellevue — a high concentration of restaurants and hotels, services, and transportation, housing options, schools, open space, and green space. It’s a very diverse and eclectic community on the Eastside.
We felt like there was somewhat of a paradigm shift, or certainly a demographic shift, that the Eastside was so well-poised to take advantage of that. It was a very compelling opportunity for us.
Q: What else is Vulcan Real Estate looking at in terms of Eastside development?
A:We’re pretty focused on these two projects, given the scale. They’re each about a million square feet. It’s a sizable commitment. Any one of those at a million square feet requires a pretty significant amount of work and commitment for the organization.
But we stay active in the market. If the right opportunity comes along, you might see us taking advantage of it.
We’re interested in expanding our residential portfolio on the Eastside. We like the Eastside markets near Bellevue — Kirkland, Redmond, Bothell, Issaquah, and the I-90 corridor. I think those are all interesting markets that are part of that mosaic that really speaks to the quality of life for the Eastside.
Q: Is Vulcan Real Estate different today without Paul’s leadership?
A: Paul is very, very missed. The legacy he built is incredible. He continues to inspire us every day.
Paul also planned for the future. The leadership team — including (his sister) Jodi Allen, who has returned to a leadership role — is well-positioned to continue carrying Paul’s legacy forward. We’re really grateful for that.
Paul built the organization to be evergreen, to last and endure. Our mandate is to continue to do the things Paul wanted us to do, and to continue to really adhere to the tenets of doing good investment work, being a leader in environmental sustainability, and being a really good corporate citizen and civic leader in communities where we work.