As a result, instead of adding 2.2 million sf of space over the next one to two decades, Microsoft will add 3.1 million sf over the next three-and-a-half years, taking its headquarters and owned satellite campuses in Redmond to more than 10 million sf. The result will be one of the largest corporate campuses in the world.
As part of the traffic mitigation plan, Microsoft will dedicate $35 million to transportation and infrastructure improvements in Redmond including improvements to streets, sewers, storm sewers and an overpass over SR520. The overpass will connect the east and west sides of the campus, allowing for easier traffic flow on the campus and through the surrounding communities.
Looking further ahead, Microsoft still has room to add at least one million sf to its existing campus with little effort. It also owns some 63 acres in the Issaquah Highlands that, when needed, can support an additional 1.2 million sf of buildings.
Almost half of Microsoft's worldwide employees work in the Puget Sound area. The company employs more than 30,000 workers in the region and another 33,000 globally. In this fiscal year the company expects to add approximately 4,000 to 5,000 net employees to its work force. It expects approximately 40% of the net additions will be in the US, and of those a vast majority will be in the Puget Sound region.
Safeco announced last month that it had agreed to sell its 46-acre, 1.4-million-sf campus here to Microsoft for $209.5 million. The sale is expected to close during the latter half of the year. Microsoft had the right to terminate the deal up through Sunday, Feb. 12. Safeco can do the same up until April 13. After those periods are up, the only other out is if Safeco cannot obtain construction permits for its University District expansion by Jan. 13, 2007. In that instance, either side could terminate the deal.
The deal would include a leaseback of up to three years of three buildings on the campus containing 549,180 sf of office space and 70,649 sf of warehouse space, which would allow time for the expansion of its Seattle headquarters. The pending sale of the campus does include a Safeco data center on the site.
Outside of the deal, Safeco has agreed to lease to Microsoft beginning this month a 218,496-sf office building on the campus that it vacated last year. The lease would terminate on completion of the sale and includes certain extension rights should the sale not go through.
Safeco is planning to vacate its Redmond campus and consolidate its 3,200-person regional operations on and around its 5.5-acre headquarters campus in Seattle's University District. Safeco's option to kill the deal is directly related to the fact that Safeco does not yet have all the necessary approvals in place to expand its Seattle headquarters from 670,000 sf to 930,000 sf.
Eighteen months ago, in July 2004, Eddie Bauer Inc. agreed to sell its 232,700-sf, three-building headquarters on 20-acres here to Microsoft for $38 million. The agreement includes a three-year, $9.3-million leaseback by Eddie Bauer that can be terminated without penalty after two years. The campus is located across a highway (SR 520) from Microsoft's main campus. The sale-leaseback was related to the Ch. 11 bankruptcy reorganization of the retailer's Downers, Grove, IL-based parent company Spiegel Inc.
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