If Microsoft is the engine that drives the Eastside, then Bellevue’s commercial real-estate market just got a turbo boost. The Redmond-based company put the pedal to the floor, leasing 561,000 square feet at the City Center Plaza office building.
The tech-giant will occupy 25 of the 26 floors that make up the office building at Northeast Sixth Street and 110th Avenue Northeast in downtown Bellevue. Beacon Capital Partners and Wright Runstad & Company are the developers behind the office tower currently in the construction phase.
Once completed, City Center Plaza will house 2,000 Microsoft employees in addition to the 1,100 company employees that currently reside at Lincoln Square. Microsoft also leased 740,000 square feet in both towers of The Bravern, an office project that will cater to 2,300 employees. An additional 2,100 are expected to move into the Advanta office complex in Factoria, set to open a year from now, bringing the head count to more than 7,500 Microsoft employees in Bellevue.
As reported by the city, employment in Bellevue’s downtown core is expected to grow by about 40 percent, from 33,000 to 48,000, between 2006 and 2010. Microsoft will account for about half of that growth.
“Microsoft, although not headquartered in Bellevue – they are, of course, a major international and industry leader,” explained Thomas Boydell, the Bellevue Office of Economic Development manager. “Their growth, acquisitions, and spin-off businesses are significant beyond our current ability to measure them.”
Another major employer making waves in Bellevue is Expedia. The company will occupy 16 floors, approximately 348,000 square feet of office space at Tower 333. Between now and the end of next year, employment in Bellevue, based on what has been publicly-announced by large employers, will rise to about 6,000 jobs. Ninety percent of those jobs will be accounted for by Microsoft and Expedia.
“Microsoft’s decision is significant as a signal of confidence in the downtown office market,” stated Boydell. “Microsoft is playing a key role in making the city’s plan come to fruition.
With the big chunk of space gobbled up by Microsoft, tenants can expect to see a continued pattern of rental rates rising and vacancy remaining on the low side.
“The office market will continue to stay tight over the next 12 to 18 months because there won’t be any new space delivered to tenants during that time,” explained Thomas Bohman, a commercial real-estate broker for Cushman & Wakefield in Bellevue. According to Bohman, the current vacancy rate for Class A office space in downtown is 5.7 percent compared to 8.8 percent outside of the downtown core.
“Overall, the announcement is pretty good news for the market and for Bellevue.”
Lindsay Larin can be reached at email@example.com or 425-453-4602.