Microsoft can terminate the transaction prior to Feb. 12. Safeco has until April 13 to kill the deal. After those periods are up, the only other out is if Safeco cannot obtain construction permits for its U-District expansion by Jan. 13, 2007. In that instance, either side could terminate the deal.
The deal would include a leaseback of up to three years of three buildings on the campus containing 549,180 sf of office space and 70,649 sf of warehouse space, which would allow time for the expansion of its Seattle headquarters. The sale of the campus would not include a Safeco data center on the site.
Outside of the deal, Safeco has agreed to lease to Microsoft beginning next month a 218,496-sf office building on the campus that it vacated last year. The lease would terminate on completion of the sale and includes certain extension rights should the sale not go through.
Safeco is planning to vacate its Redmond campus and consolidate its 3,200-person regional operations on and around its 5.5-acre headquarters campus in Seattle's University District. Safeco's option to kill the deal is directly related to the fact that Safeco does not yet have all the necessary approvals in place to expand its Seattle headquarters from 670,000 sf to 930,000 sf.
Safeco's landmark 21-story office tower in Seattle's U-District has been the company's official home for 35 years, and the U-District in general has been its home for nearly 70 years. To make way for its expansion, Safeco not only will need to expand onto the International House of Pancakes property it owns immediately south of its headquarters tower at 43rd Avenue and Brooklyn, but also will need to develop a new 125-foot-high office tower on land it plans to acquire across Brooklyn Avenue.
In business since 1923, Safeco is a Fortune 500 property and casualty insurance company. The company sells insurance to drivers, home owners and owners of small- and medium-sized businesses through a national network of independent agents and brokers.
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