Hey, downtown Bellevue: Make room for Microsoft

Bellevue looks to be the next Microsoft company town.

The Redmond-based software giant said Thursday it will lease 1.3 million square feet of top-flight commercial office space in two high-profile projects under development by Schnitzer Northwest. The space will accommodate about 4,000 current and future employees, easing crowding on the company's main Redmond campus, where an ongoing expansion continues as planned.

"Microsoft is a center of gravity here in Puget Sound and the state of Washington, and we want to reinforce our commitment to staying here and to growing here," said Chris Owens, Microsoft's general manager of real estate and facilities.

By the end of 2009, Microsoft will have more than 5,000 employees working in Bellevue, along with a large employee population living there, Owens said.

That would be nearly twice as many workers as the largest Bellevue employers, public or private, listed in a 2005 city economic profile.

Bill Craven, who's worked in a downtown Bellevue office for the past four years, said he expects the influx of employees to bring more places to eat, more entertainment and better mass transit in and out of the city.

"Best of all, it will give the sense of actually working in a downtown core, instead of the suburbs," he said in an e-mail.

Leslie Lloyd, president of the Bellevue Downtown Association, agreed.

"I think Microsoft will inject more of an 18-hour day into downtown Bellevue," she said. "They're legendary for their work habits. I think we'll see more people moving around for longer periods of the day, associated with the workplace."

Microsoft will occupy almost 740,000 square feet in two buildings at the Bravern multi-use complex in downtown Bellevue. High-end retailer Neiman Marcus has already committed to be the anchor retail tenant in that complex.

"I couldn't have scripted it better," said Dan Ivanoff, managing investment partner of Schnitzer Northwest.

Microsoft employees will begin moving into the Bravern in late 2008, continuing into 2009.

The software giant also claimed all three seven-story buildings, totaling 600,000 square feet, in the Advanta Office Commons, which is currently under construction in Bellevue's Eastgate area north of Interstate 90. Employee move-in is scheduled to begin late this year.

The parties would not provide details of the leases, other than to describe them as "long-term."

Microsoft already had agreed to lease 317,000 square feet in Lincoln Square, another high-end downtown Bellevue office tower. An expected 1,400 employees are scheduled to begin moving in there in July, Owens said.

Microsoft's big move into Bellevue will not slow its expansion on the Redmond campus, where some workers are packed two to an office and valets squeeze cars into overfilled lots. Nor does it mean the company is accelerating its employment growth plans.

Owens said the company has about 40,000 employees, including contractors, in the Puget Sound area.

"The complexes we're adding are intended to meet the head-count growth that we've already experienced in the past 18 months as well as what we're forecasting in the coming months," he said.

In early 2006, Microsoft announced a three-year plan to expand its Redmond campus by a third. It's about halfway through that expansion, which will add about 3.1 million square feet of space in new construction and acquired buildings.

Employees on the Redmond campus should feel relief from the crowding by June of next year, when a "substantial amount" of that expansion will be completed, Owens added.

The company will decide within the next two to three months which departments will move to Bellevue.

"I think it's good for us to offer different kinds of environments for our employees. Some people like a campus setting," Owens said. "Maybe some people see themselves as urbanites. They might not want to come to work at Microsoft on a suburban campus."

Microsoft is still eyeing expansion at the Issaquah Highlands as "an option for the long-term," he said.

Issaquah Mayor Ava Frisinger was not disheartened by Microsoft's latest real-estate move. Like many in the region, she expects the company to continue growing.

"They're holding the property in the Highlands with the expectation that they will be building over 1 million square feet of office space at some point," she said. "Whether it's seven years out, 10 years out, it's rather hard to say."

Seattle Times business reporters Tricia Duryee and Amy Martinez contributed to this report.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com