Downtown Bellevue has seen a tremendous volume of leasing activity with tenants looking to lease approximately 300,000 square feet in the submarket. As expected, technology tenants are leading the way and focusing on retail services and other amenities that downtown Bellevue offers. In response, the competition to attract the best tech companies is driving Landlords to improve quality amenities throughout the CBD. Other Eastside submarkets (I-90, SR-520, Kirkland, Bothell and Redmond) are also seeing steady interest, however at a slower pace than downtown Bellevue.

Downtown Bellevue vacancy is expected to drop from 13.4% to 10% by year end 2012 based on pending leases. The majority of large blocks of space (2 floors or more) will be leased, pushing larger tenants to I-90, and Redmond in 2013.

By 2014 rental rates will spike as vacancy rates dip into single digits and tenants continue to compete for remaining available space.

There will be very little new construction on the Eastside before 2016 given the time required to permit, pre-lease and finance projects. Landlords will enjoy a steady run in rental rates for at least the next three (3) years.