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Microsoft Preleases Five Buildings in Record Deal

BELLEVUE, WA-The public software company preleases 1.3 million sf, the entirety of two new office projects here that are under construction.

By Brian K. Miller | Updated on April 05, 2007

BELLEVUE, WA-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. With a significant chunk of space in Bellevue’s near-term development pipeline disappearing in an already tight market and the new owners of Equity Office Properties’ 10-million-sf local portfolio no doubt looking look to increase their capitalization rates, Bohman says “there is going to be some serious rate inflation.”

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.

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