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Almost $1k for two rears, lol. I've gone through Bimmerhaus several times and I believe they use the Big O store up in/near Broomfield. I've had them do some large/expensive wheels and have not had an issue (yet...) I also had Discount Tire on Broadway do some 18s on my old M3 and they did a good job. Personally, if you are really sensitive you could always buy the tires from TR or elsewhere and have the dealer do the install if they have a road force balancer.

In terms of tires, I use the Yoko Advan AD08 tire and love them. They have phenomenal grip and ride really well. They might be a tad louder than the PS2 when new but I don't find it an issue. Best part is that they are a lot less expensive than the PS2 - TR has them for $259 front, $296 rear (~$1100 for the set.) Don't recommend mixing and matching tires so only do this if you are willing to replace all 4.

If you want to stay with Michelin, I would do the new PSS. Most reviews find them much improved compared to the outgoing PS2. Pricing is also a little lower than the PS2. They don't offer the rear OEM size of 265/35 but you can go up in size both front and rear on the OEM 19s. Lots of reviews/info in the wheel/tire section.