Microsoft to leave one of three Issaquah offices

August 13, 2013

By Peter Clark

Microsoft will vacate at least one Sammamish Park Place building.

The software giant let its lease expire recently on one of the three buildings it inhabits in the campus.

It was unclear what effect the departure would have on the local economy. City officials said they could not disclose how many employees worked within the property.

“Our employment numbers we get from the Department of Revenue,” Economic Development Manager Andrea Lehner wrote in an email. “In order to get this information from them, we must sign an agreement requiring nondisclosure of, among many things, employee numbers.”

She said the city expects some change to financial numbers, but highlighted what she viewed as positive signs within Issaquah’s economy.

“We do foresee there being some temporary impact while we work with Vulcan on finding the next tenant,” she said. “But it is important to remember that their departure is at a time when the city is also benefitting from much growth of other large employers, such as Costco and Swedish.”

The Greater Issaquah Chamber of Commerce said it was grateful for what Microsoft had given the city over the years and stressed the importance of filling the office space.

“Like the rest of the region and state, we continue to support and champion Microsoft’s success as the foundation for the Eastside’s technology and innovation future,” Matthew Bott, chief executive officer of the Greater Issaquah Chamber of Commerce, said. “We have appreciated the investment the company has made in Issaquah over the past decade through the placement of hundreds of high-paying jobs in our community.

“Going forward, we are working collaboratively with the city of Issaquah and the commercial brokerage community to ensure that the space to be vacated is filled as soon as possible with high-paying jobs that will support our growing local economy.”

According to Vulcan Real Estate, Microsoft took a passive route to announce the decision.

“When a tenant has an option to renew, they must let the landlord know they wish to renew by a certain date, typically, within a certain amount of time before the lease expires, for example 12 months before the expiration date,” Vulcan representative Lori Mason Curran said. “When a tenant does not indicate a desire to renew the lease and that date passes, then the landlord is left to assume the tenant will not renew. In the face of uncertainty, it is in the landlord’s best interest to try to find a new tenant if the existing tenant has not exercised their renewal option.”

Curran said that Vulcan has received no indication whether Microsoft will renew its leases, which expire within the next several years, on the other two buildings that are in Sammamish Park Place. In the meantime, Vulcan is advertising the opening office space, but would not comment on any possible new tenants.

“We are actively marketing the building that Microsoft will be vacating but do not have any specific prospects to discuss at this time,” she said. “As a policy, we never discuss prospective tenants or lease status until a lease is signed.”

The news comes after the city has acknowledged Microsoft has placed its large land parcel in the Issaquah Highlands up for sale, as confirmed by Economic Development Director Keith Niven.

Niven said he does not see the move from Sammamish Park Place as a negative reflection of the city. Rather, he explained both how Microsoft shifted away from its ideas of sprawling campus office parks and how the company had taken larger steps elsewhere.

“Microsoft took some strides to make some pretty heavy investments into Bellevue,” Niven said, describing the stretch of corporate offices between Microsoft’s headquarters in Redmond and its skyscraper in Bellevue. “They’re basically going to line that corridor with as many employees as they can. That just makes sense.”

He said the move should not be viewed as dwindling Issaquah cachet in the technology industry, but rather as Microsoft consolidating regional teams.

“I don’t think it’s a reflection on Issaquah,” he said.

Microsoft’s public relations team Waggener Edstrom declined to comment on the move.


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One Response to “Microsoft to leave one of three Issaquah offices”

  1. Smoley on August 13th, 2013 7:53 pm

    Wow. Spacelabs Healthcare left that area less than a year ago and took away 400 jobs and now Microsoft leaving? What gives?

    It makes one wonder if the recently revealed Issaquah Central Plan had anything to do with Microsoft’s decision to not renew its lease. The city council’s decision to increase population density significantly and not address local traffic and other infrastructure issues may not be sending the right message to a large employer like Microsoft.

    It will be very interesting to see if MS renews the lease on the other two buildings in that complex in the upcoming years.

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