Microsoft to vacate more Eastside office space as leases end – Puget Sound Business Journal – The Business Journals

Microsoft to vacate more Eastside office space as leases end – Puget Sound Business Journal – The Business Journals

Microsoft to vacate more Eastside office space as leases end – Puget Sound Business Journal – The Business Journals 0 0 Alan Dickson

Microsoft Corp. (Nasdaq: MSFT) confirmed Monday to the Business Journal that it will vacate more big office spaces on the Eastside next year after the leases expire.
The Redmond-based software maker has leases at three properties in Bellevue and Issaquah that end in 2023: Advanta Office Commons, Lincoln Square North and 90 East/Sammamish Park buildings C and D.
The company told the Business Journal in July that it would let go of its space at the 585,000-square-foot Advanta campus in East Bellevue in September 2023. But it had not yet disclosed its plans for the other two properties.
Now Microsoft says it will clear out of at least some of the space at the other properties as well.
At Lincoln Square North in Bellevue’s central business district, Microsoft will relinquish one-third of its 382,000 square feet after September 2023. A Microsoft spokesperson said the company won’t fully leave Lincoln Square North because portions of the lease run to 2025.
At Sammamish Park in Issaquah, Microsoft’s lease is set to expire in October 2023. When it does, 396,000 square feet of office space will become available in the Interstate 90 corridor submarket.
Microsoft has two other leases in Bellevue set to end at later dates: City Center Plaza in 2024, and Bravern I and II in 2025.
Though Microsoft’s plans are a worrying sign for the Eastside office market as a whole — and the I-90 corridor and Bellevue CBD submarkets in particular — the company has signaled its departures aren’t in response to economic headwinds affecting the tech industry. A spokesperson said the moves were not tied to layoffs or new hires.
Broderick Group said in its third quarter Eastside market report that Microsoft plans eventually to give up even more space as leases expire, and painted a dire picture for the market if the company fully jettisoned its office tower portfolio.
Microsoft put into effect its “final stage” hybrid work policy earlier this year, in which employees were to work with managers to set their remote work schedules. The move effectively took the pressure off of Microsoft to house space for a full return to office. And after major campus renovations in Redmond, the company will be able to accommodate 8,000 more employees. Microsoft currently has over 9,300 workers in Bellevue, according to the city’s latest comprehensive annual financial report.
Renovations in Redmond are slated to wrap up as office leases elsewhere expire, with Microsoft expecting to open its 17 new buildings starting next year and wrapping up in 2025.
“If Microsoft employees migrate back to the office on a more permanent basis, then the company may rethink vacating downtown Bellevue product and avert a potentially catastrophic blow to the market,” the Broderick Group report said.
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