Microsoft Preleases 1.3 Million Sq. Ft. in Five Buildings Under Construction in Bellevue, WA

GlobeSt.com - April 6, 2007

Microsoft Corp. on Thursday said it has inked long-term leases for the entirety of two under-construction office developments here totaling 1.3 million sf. Headquartered in the neighboring Redmond, the public software company says it has leased the 740,000-sf Bravern Office Commons next to Meydenbauer Center in Downtown Bellevue and the 600,000-sf Advanta Office Commons adjacent to Interstate 90 in southeast Bellevue.

Tom Bohman, senior director of the Bellevue office of Cushman & Wakefield, tells GlobeSt.com the lease is the largest one-time transaction in the history of not just Bellevue but the entire Seattle region. Rental rates may also set a record in the near future.

The exact length of Microsoft’s commitment, the negotiated lease rates and the concession package were not released by the parties involved and not otherwise immediately available. The asking full-service rental rate for the Advanta development was approximately $35 per sf per year. The asking net lease rate for Bravern was $25 to $28 per sf, which would put the full-service rate (building services and parking) there above $40 per sf. Microsoft surely received a healthy bulk discount, say local brokers. "To unload something of that size, [Schnitzer Northwest] had to have reasonable market terms," says one source.

Microsoft says its leasing activity is in addition to plans for an accelerated expansion of its headquarters campus that were announced in February 2006. Later in 2006, the company leased 320,000 sf at Kemper Development's newest Downtown development Lincoln Square and another 87,000 sf at Eastpointe Corporate Center.

“Microsoft continues to grow at a rapid pace…,” says the company’s general manager of real estate Chris Owens. “Adding additional work space in Puget Sound, the company’s center of gravity, helps address our current space limitations and ensures that we are prepared for future growth.”

Microsoft likely will begin occupying Advanta late this year and the Bravern late next year. The two projects are developments of Schnitzer Northwest LLC, a Bellevue-based partnership that includes Portland, OR-based Schnitzer Investment Corp. and Dan Ivanoff. Sphere: Related Content