By Jack Stubbs
In this year’s largest property sale in the Puget Sound region, Microsoft recently made moves to expand its already significant presence in Redmond, spending $250 million on a nine-building office complex that sits one mile from its headquarters across from Washington State Route 520.
On Wednesday, June 20th, tech giant Microsoft acquired the nine-building Daytona Laguna Office Campus for $250 million, or approximately $345 per square foot, King County records show. Microsoft acquired the property from Blackstone Group, one of the world’s leading investment firms based in New York City. The San Francisco office of Eastdil Secured was the listing agent on the property on behalf of Blackstone. This company has not responded to inquiries for comment about the transaction.
Blackstone Group acquired the Daytona-Laguna complex for $203 million from Houston-based Hines in November 2016, according to King County records.
Broderick Group listed space for lease in the Daytona-Laguna office complex in fourth quarter 2017, stating there were 36,881 square feet available in one of the buildings (located at 15002 NE 31st St.) However, the property is no longer listed for lease on the brokerage firm’s web site.
The four-parcel campus is comprised of nine buildings: the four-story Daytona Microsoft building (built in 2002), which totals 211,731 square feet and is 100 percent leased to Microsoft and the two-building Daytona Bright Horizons property, which totals 39,582 square feet and was built in 1978. The office campus also includes the three-story Laguna North Building (located at 15011 NE 36th St.), which totals 104,353 square feet and is 100 percent leased to Microsoft; the three-story, 100,403 square foot Laguna South building, which was built in 1999 and is currently leased to HCL America and the four-building Honeywell property, which totals 268,881 square feet and was built in 1960.
The nine-building campus is located approximately one mile from Microsoft’s current headquarters—at 1 Microsoft Way—and is approximately four miles to the south of downtown Redmond. Additionally, the office complex is about five miles to the northeast of Bellevue CBD and roughly one mile from access to Washington State Route 520.
Microsoft shows no signs of pulling back on its significant presence in the Puget Sound region—particularly on the Eastside—and has been active in Redmond in recent months. In February 2018, the company leased 86,000 square feet in Shorenstein Properties’ Redmond Town Center complex located at 16221 NE 72nd Way. And in November 2017, Microsoft announced its plans for the significant upgrades to its 500-acre Redmond headquarters campus.
In the fall of 2018, Microsoft will break ground on a multi-year campus revamp project that will include 18 new buildings, 6.7 million square feet of renovated workspace and a $150 million investment in transportation infrastructure improvements, public spaces, sports fields and green spaces.
The new campus, which will take 5 to 7 years to complete, will provide room for an additional 8,000 employees on top of the 47,000 that currently work at the existing Redmond campus. The campus redevelopment will require the demolishment of 12 buildings; and once complete, the new campus will comprise 131 buildings (up from the current 125 buildings which comprise 15 million square feet). The new campus will also include a new pedestrian/bicycle bridge over Washington State Route 520 that will connect the company’s east and west Redmond campuses as well as a 2-acre outdoor plaza that will fit 2,000 employees.
Founded in 1985, Blackstone has since become a preeminent investment firm, emphasizing their aim to “create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work,” according to the company’s web site. After roughly 30 years of operation, the firm has grown considerably, with over 2,200 employees across 20 offices worldwide.
As of September 30 2017, the company had 220 million square feet of office space globally. Blackstone has made its presence known in Seattle in recent months. On September 13, 2017, in one of the year’s largest commercial sales, the company bought the Exchange Building, a 22-story 384,302 square foot commercial property located in the downtown core for $156.5 million from Boston-based Beacon Capital Partners.