Capstone and PGIM Pivot From Office to Housing in Bellevue

Capstone Partners and PGIM have swapped plans for an 11-story office building in Downtown Bellevue to a 27-story apartment highrise next to Amazon offices.

The Seattle-based developer and New Jersey-based unit of Prudential Financial’s revised plans now call for a 335-unit tower at 305 108th Avenue NE, the Puget Sound Business Journal and Connect CRE reported.

The apartments would replace a two-story, 21,600-square-foot office building, built in 1979.

Capstone and PGIM bought the 0.8-acre property approved for a 33-story condo tower next to Amazon Bingo Plaza in 2021 for $32.5 million.

At the time, Amazon.com was expanding with plans to more than double its workers in Bellevue to 25,000; the commercial market was red hot, according to the Business Journal.

The joint venture initially proposed building a 12-story, 194,700-square-foot office tower with an underground garage for 354 cars, according to Connect CRE. The project later was expanded to 224,000 square feet, according to the Business Journal.

Then came a pandemic shift to remote work. The office vacancy in Downtown Bellevue in the second quarter ending in June stood at 19.9 percent, according to Broderick Group, with availability at 22.5 percent.

At the same time, many consider Bellevue to be among the better office markets in the U.S., withits high amenities and lower crime. Nonetheless, Capstone and PGIM tore up their office plans.

The revised project, designed by Seattle-based Runberg Architecture Group, will contain 355 apartments, with shops and restaurants on the first two floors and four levels of underground parking for 282 cars.

The ground floor will have 3,700 square feet of retail, while the second floor will contain 4,300 square feet more, plus a terrace deck for residents. The apartments will contain floor-to-ceiling windows and a stack of external balconies on one side, according to a rendering, which depicts a rooftop deck.

“At grade the building sets in to allow for an open plaza,” states a project description by Runberg. Its two-floor base will be “very glassy and transparent.”

On the same block, Houston-based Patrinely Group and New York-based Dune Real Estate Partners are building a 21-story, 480,000-square-foot office building, according to the Business Journal. No tenants have been announced.

— Dana Bartholomew