Once Bellevue’s largest employer, Microsoft is no longer even among the Eastside city’s top 10 employers.
The company’s fall from the top spot ran parallel to its $5 billion Redmond campus renovation and a broader work-from-home revolution. As employees opted for hybrid and remote work options in the latter years of the COVID pandemic, Microsoft has been retreating to its Redmond campus.
Microsoft has not enforced a companywide return-to-office policy, unlike its local tech peer Amazon, which requires employees to spend three days a week in the office.
The company’s workforce peaked in Bellevue in 2021 when it had roughly 9,300 employees there, according to city annual financial reports. Since then, Microsoft’s employee count dwindled each year as it vacated a multi-building office park along Interstate 90 and four office towers in downtown Bellevue.
The city’s 2023 financial report does not say how many employees Microsoft still has in Bellevue, and the company declined to comment on its head count there. However, it has only held on to two floors in Bellevue’s Lincoln Square North tower for its subsidiary LinkedIn. Public records obtained from the city of Bellevue indicate those floors can hold about 120 total employees.
Microsoft had 53,625 Seattle-area employees as of June, according to the Puget Sound Business Journal.
Microsoft’s exodus from Bellevue has strained downtown Bellevue’s office market. The Broderick Group, a Bellevue-based commercial brokerage, said in a recent report that downtown Bellevue’s office vacancy rate for 2023 had risen to 11.9%, a stark contrast from 2019 when it was 3.9%. That figure is projected to jump to 17.6% in 2025.
Collectively, Microsoft has left behind about 1.9 million square feet of office in downtown Bellevue. While that has created large empty blocks, brokers say they are optimistic about the market. Major brokerages including the Broderick Group, Colliers International and Savills International have all speculated that tenant demand will pick up in the wake of the pandemic. And since Bellevue has a smaller inventory than Seattle’s urban submarkets, a few tenants could produce big swings.
“It seems like Bellevue is the kind of town that historically needs one tenant, because when Symetra came [in 2004], the market felt like it does now,” said Jeff Chaney, an executive vice president with Colliers. “There’s always a chance a company comes around … and needs some space.”
Amazon, Bellevue’s largest employer for the second year in a row, was itself a soothing balm for the market when Expedia decamped for Seattle in 2019. Two years after setting up a Bellevue office in 2017, Amazon scooped up space that Expedia had left behind. The online retail giant has since grown to more than 12,000 employees in Bellevue.
The hole left by Microsoft gives companies that could be considered second-tier to firms like Amazon and Meta a chance to claim prime real estate, Chaney said.
The largest property Microsoft left behind is already being taken in small chunks by a diverse set of tenants.
Microsoft announced last year that it wouldn’t renew its lease in the 26-story City Center Plaza office tower this June. It moved employees out last year, according to public records.
Five floors of the building now have pending leases, according to the Broderick Group. They aren’t tech tenants, but instead HDR Engineering, Wells Fargo and accounting firm Clark Nuber.
“While there remains a long road ahead, tenant demand is aggressively chipping away at the glut … in the Bellevue market,” the Broderick Group’s report said.
One of the biggest deals of the year in Bellevue came from Pokémon, which signed a 374,000-square-foot office lease in The Eight, a new tower the company will move into next year. Pokémon’s expansion is a mixed bag, though, as it is marketing nine floors for sublease, between the Lincoln Square North and South towers, Broderick Group principal Grant Yerke confirmed.
“It’s part of their strategy to consolidate and grow operations at The Eight opposed to two separate towers in the Bellevue Collection,” Yerke said.
If Bellevue is looking for that one big tenant, it could be ByteDance’s TikTok. The Beijing-based social media platform leased seven floors in the Lincoln Square North tower last quarter, according to an office market report from Savills. That’s in addition to six floors it leased in the tower in the first quarter of 2024, all of it former Microsoft space.
The Information, a tech industry publication, reported last year that TikTok was establishing a foothold in the Seattle area as a hub for its e-commerce venture, TikTok Shop. The company has about 880 open roles on its website, most of them under TikTok Shop.
TikTok also leased several floors of Bellevue’s Key Center over the past year, offices that previously had been held by SAP Concur and Meta.
“Those are pretty big deals you’re not seeing in Seattle right now, but you’re seeing in Bellevue,” Chaney said.
