Analysts say the deal has not triggered a wholesale move to reduce the glut of sublease space in the region. But it does solve an immediate need for the software giant, which plans to move many of its divisions to a new project in nearby Issaquah.
The corporate center, once used for employee training, has a cafeteria and workout facility, which should work nicely for the Bellevue-based school that now has approximately 15,000 students around the country. Locally, the private university occupies about 35,000 sf near Interstate 405 in Bellevue and another 80,000 sf a few miles south in Renton.
While sublease space continues to be a concern throughout the region, the market showing the highest absorption totals was the Redmond office market with over 800,000 square feet absorbed. Microsoft is headquartered in Redmond, just north of Bellevue. The company, however, owns buildings in several Puget Sound locations.
City University, which started in the Puget Sound region with primarily night classes and catering to students with day jobs, now has about 500 students enrolled for the present term in Bellevue. While enrollment figures vary, most quarter enrollments average 400-600 students.
School officials indicated the new space would enable the school to grow to about 750 students per quarter in the next year. Eventually, the Bellevue enrollment numbers could equal 2,000, the approximate number of students now attending the Renton campus.
School officials, who hope to be moved most of their administrative offices in time for the fall quarter, indicated the continuing layoffs in the dot.com industry have renewed interest in many educational programs.
The new space leased from Microsoft, combined with the existing Bellevue space, will provide more space for teacher conference rooms and meeting areas. Most faculty that now keeps office space at the Renton facility will be moved to Bellevue and commute to the Renton campus for classroom time. City University now employs about 145 people at the Renton facility and 95 in Bellevue.
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