Locals Say EOP Now Drives Bellevue Market

BELLEVUE, WA-With the acquisition of Menlo Park, Calif.-based Spieker Properties in July, Equity Office Properties became the largest landowner in the Eastside’s key city. The 410-acre central business district here consists of approximately 5.22 million sf of office space and, at last count, EOP owned more than 2.56 million sf–nearly half the total.

Last summer, many speculated about the impact such a dominant player would have on the market. But, with recent events and the economy being what it has been since the acquisition, has EOP been impacting the standards in Bellevue?

A local real estate expert, speaking on the condition of anonymity, tells GlobeSt.com, “Initially, they (EOP) weren’t adjusting their rates at all, but now they are beginning to get real relative to rates.” He says that with the size and quality of its inventory, the Chicago-based REIT has the clout to undercut competitors — forcing other Bellevue landlords to step in line.

“EOP’s going to be more aggressive until they achieve the (occupancy) numbers they want,” the source says. From that standpoint, he continues, the Eastside’s largest landowner is impacting the market, driving rents down to meet its own needs — offering rates in its top-quality properties as low as lesser properties of its competitors.

With its inventory, this local broker says EOP can draw tenants in a market while others are scrambling for viable tenants. “Generally, EOP’s got the higher-end buildings and better parks in town,” he says. “And, they’re becoming more and more competitive in the marketplace, breaking their published rates and becoming aggressive. So, if they want to meet or beat the market, they’ve got the quality product to attract tenants and, if they want, they can buy them.”

Terry Holt, a spokesperson from EOP’s headquarters in Chicago disputes the contention that EOP being such big dog in Bellevue allows it to run the block. “No one company can set the rental rates,” says Holt, adding, “It’s strictly a matter of supply and demand.”

Holt does say, however, that the size and scope of EOP gives it an operational edge, locally and nationally.

“An example maximizing our operating efficiencies on a national scale is insurance,” Holt says. “We can get better rates as a national company than a smaller one.”

She says the national nature of EOP also “allows us to leverage our space for our customers. We’re like a brand. You know what you’re going to get, and some of our existing customers will lease other properties from us sight unseen,” Holt says. “Today’s market is a perfect example.”