Bellevue grabs attention of international investors

Downtown Bellevue has attracted the attention of investors around the world. Amazon has promised to put 25,000 employees there by 2025. New light rail service there could carry 50,000 people a day by 2030. All that change has raised Bellevue’s visibility on the global stage.

One Bellevue realtor has been fielding a lot of calls recently from China.

Holly Yang is a real estate broker at Kidder Mathews in Bellevue. She’s part of a special bilingual team there that studies China. She says, to understand the real estate boom in Bellevue, it helps to look across the Pacific.

“It’s interesting, the real estate market in China is totally different than here. It appreciated, maybe 10-fold in the last 20 years. So it’s hard to imagine, and that created a lot of wealth.”

Yang says for more than a decade, people who earned money in China have been looking for other places to put their wealth. One reason is that property ownership in China comes with strings attached.

“In China, the government owns the land. So when you buy a condo, you only have 70 year – or 55 year – so it’s like a lease hold interest. So it’s like a right to use, but not a right to own.”

That’s different than it is in many other countries, like the U.S., where land can be privately owned.

“It’s very different. So for my clients, invest in the U.S. – it’s not just, ‘Hey, what’s my return?’ It’s also, ‘Oh, I have all these choices, and I own the land. And I can pass it to my son, my grandson, it’s in my family. And nobody can take that away from us,' right?”

Yang says investors in China scour the world for good deals. Some buy individual condos. Some buy land and develop projects on them. These aren’t necessarily places for them to live – they’re investments.

“There are so many high-net-worth, ultra-wealthy investors. They actually travel all over the world to invest. So they might own land in Canada, they have projects in Bellevue, but they also have projects in Australia, and also, they might also have some condos in Beijing,” she says.

In this way, she says investors diversify their investment, “instead of putting all your eggs in one basket.”

Yang says Chinese investors have been interested in Seattle and Bellevue for years, for a lot of reasons. Compared to Vancouver, or San Francisco, the land is a bargain. And Bellevue is considered diverse, which can help make people from different parts of the world feel comfortable.

Now, Yang does something new to pitch investors. She shows them a map of Amazon’s properties in Bellevue, the towers it’s leased, the towers it’s building. It catches their attention. “Amazon’s investment expansion into Bellevue has a huge impact. [It] spiked investor interest even more so.”

That’s meant payday for local developers who’ve spent years bringing projects to fruition.

“You know, you get little bidding wars and the price rises. So, we’ve benefited from that,” says Greg Johnson, developer and CEO of Wright Runstad.

His company just sold a big project in Bellevue’s Spring District to an international buyer in Toronto.

“When we’re putting a property on the market, we absolutely look for an intermediary or a broker who can represent the property to the various parts of the world, in particular Asia and China specifically,” he says.

Johnson says buyers around the world still think of Bellevue as part of Seattle. But he says Bellevue’s rise has improved Seattle’s reputation. Now, investors think of Seattle as a great place to put their money – like a bargain basement version of New York or Los Angeles.

“And now, [international investors] are saying – ‘Oh, and if I’m gonna be in Seattle – Bellevue is…’" Johnson catches himself before overstating Bellevue's name recognition. "You know, they may not say ‘Bellevue,’ but when they say ‘Seattle,’ they’re definitely including Bellevue.”

There are pros and cons to all this attention. It pushes land costs higher. But the money can be taxed (or at least tapped, through mechanisms such as Seattle's Mandatory Housing Affordability system), which helps pay for affordable housing.

It’s also important to note that for all the interest in Bellevue, not that many deals are actually going through. That’s because there’s not much developable land left in downtown Bellevue. Most of it's spoken for by the likes of Amazon, Vulcan, and Canadian developer Onni Group.

The remaining opportunities lie east, following the path of light rail. And landowners there are sitting on those properties until Bellevue upzones them.

Once that happens, people like Greg Johnson and Holly Yang will be working the phones, making deals. And they’ll make sure there’s somebody on their team who speaks Chinese.