Developers of the Chestnut Flats mixed-use building in downtown Bellingham have submitted preliminary documents with the city for an expansion that would add 21 new apartments along with an additional 1,100 square feet of street-level commercial space.

The new apartments would be built above an existing altered basement on the east side of the current building, according to city planning documents. The city has listed the project’s valuation at $1.35 million.

Chestnut Flats is located at 119 W. Chestnut St., the former location of Dream On Futon.

David Hovde, a broker with Windermere Real Estate in Bellingham, who has been handling leasing in Chestnut Flats, said demand for the building’s first phase of apartments was extremely high. He said when the building first began leasing its residential space, he was able to secure commitments for all of the existing 37 units within 45 days.

The apartments in the second phase of the building will be different than those in the first, he added.

Hovde said phase two will include plans for two-bedroom apartments and “executive” one-bedroom units. Rental rates have not yet been determined.

He said construction would likely take eight months, start to finish, once a building permit is issued.

Evan Marczynski, staff reporter for the Bellingham Business Journal, can be reached at 360-647-8805, Ext. 5052, or evan@bbjtoday.com.