The deal includes 94,800 sf leased directly from Vulcan and an additional 32,000 sf subleased from Group Health Cooperative, which last month moved its headquarters into the remainder of the complex. Microsoft says the leasehold--its largest in Seattle--will help it attract and retain employees who don't like or don't need to make the bumper-to-bumper cross-lake commute to company headquarters in Redmond, WA.
Local brokers tell GlobeSt.com that the asking lease rate for space in the building was $40 per sf. The rate, which includes $10 per sf in operating expenses, assumed a five-year lease and a $30-per-sf tenant improvement allowance. The negotiated lease rate on the transaction was not released by Vulcan or Microsoft. Ray Attisha of CB Richard Ellis had the leasing assignment; he was not immediately available Thursday afternoon for comment.
Located on the city's soon-to-be-operating streetcar line, the project spans a full city block bordered at Westlake and Terry avenues and includes 40,000 sf of street-level-floor retail. The development was designed to achieve a LEED Gold rating from US Green Building Council. Callison designed the complex and GLY was the general contractor.
About 400 Microsoft employees, including its Online Services Business, will occupy the top four floors of the six-story West building starting in March 2008. The building also will provide temporary work space for 150 Microsoft employees who need to conduct meetings in Seattle or avoid the rush-hour commute to company headquarters.
Approximately 36,000 of Microsoft's 80,000 employees worldwide work in the Puget Sound area. In February 2006, Microsoft announced that it would accelerate campus development plans, expanding its Redmond, Wash., campus by one-third of its current size, making it one of the world's largest corporate campuses. The Seattle expansion is in addition to the company's previous plans, which are in progress and on schedule to be completed in 2009.
Microsoft also has been leasing additional space on the Eastside. In May, it inked long-term leases for the entirety of two under-construction office developments here totaling 1.3 million sf, 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. 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.
Vulcan owns approximately 60 acres in South Lake Union that it has been actively redeveloping for several years. To date, the company has delivered eight new commercial, residential and mixed-use projects in South Lake Union totaling approximately 1.4 million sf. An additional 1.4 million sf is currently under construction and 1.5 million sf is in the pre-development pipeline. Expected to total 10 million sf upon completion, it is said to be one of the largest urban revitalization efforts in the U.S.
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