The I-90 exit

Katie Ross, Microsoft’s director of carbon reduction strategy, rides an electric bike from Seattle to the new buildings at the company’s headquarters in Redmond. Melanie Nakagawa, Microsoft’s chief sustainability officer, has considered running to work from her home in Kirkland. Sound Transit even plans to run trains from Bellevue to the Redmond campus before the extension from Seattle to Bellevue opens next year.

If Microsoft’s plan plays out as expected, the era of the car-centric campus commute may soon give way to trains, bicycles, buses and, in some cases, running shoes.

These commuting options would have been unfeasible for some of Microsoft’s biggest offices a decade ago, when the company occupied space in several corporate parks along the Interstate 90 corridor, accessible by little else than a personal vehicle.

But these eco-friendly habits compounded by the pandemic-triggered workspace revolution has left relics of yesteryear in the I-90 office submarket, which is saddled with completely vacant buildings and rising availability. An analysis of CoStar data from last year showed that out of the 15 emptiest buildings in the Puget Sound region, six of them were along I-90.

The submarket, which began showing cracks in the 2010s, was once home to thousands of Microsoft, Boeing and T-Mobile employees but today lacks the amenities and accessibility that newer offices tout.

“Tenants today are looking for quality spaces in amenity-rich areas,” said Aaron Kraft, a vice president with the brokerage firm Kidder Matthews. “Unfortunately, the I-90 corridor doesn’t provide much of this.”

Without the prospect of major tenants on the horizon, offices along the I-90 corridor could face a much different future.

MAPPING EXITS | Click through the map below for more information on office campuses along the 1-90 corridor that were once occupied by some of Bellevue's largest employers.

Big tenants on the move

Availability on the Eastside was listed at 25% by the end of 2023, according to the Broderick Group’s latest office market report. Much of that is concentrated in the I-90 corridor with 44.4% availability, which includes vacant spaces and offices shopped for subleases.

Unlike other submarkets, that availability isn’t entirely based on tenants who plan to move out. Many already have, as evidenced by a 39% vacancy rate, meaning several buildings are empty.

By 2017, Boeing was beginning to give back space on the Eastside and “weaker tenants” were filing for bankruptcy, according to previous Business Journal reporting.

But Microsoft swooped in and said it would renew its lease of the 585,000-square-foot Advanta Office Commons park.

“We are keeping all of our leases in Bellevue and Issaquah,” Microsoft President Brad Smith told the Business Journal in late 2017 when describing the Redmond campus expansion. “We’re not letting go of any of our leases. We have no plans to make any changes there.”

Microsoft began moving into its downtown and suburban Bellevue offices when its headquarters couldn’t contain the growing headcount and Redmond wouldn’t let it build taller buildings, expanding all over the place.

Before 2023, between the Advanta Office Commons and several buildings in the 90 East/Sammamish Park office campus, Microsoft had roughly 1 million square feet of space along I-90.

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Anthony Bolante | PSBJ

Microsoft let those leases expire in 2023, and communication records obtained from the city of Bellevue through a public records request show the buildings were empty by April 2023.

Like Microsoft, T-Mobile embarked on a headquarters expansion and renovation project before the pandemic. Remote work trends are still lingering for tech, but T-Mobile has been stricter about in-person work than Microsoft, which has been one of the more flexible employers in the region.

In 2022, T-Mobile told executives at the director level and above to be in the office at least four days per week and other employees to be in at least three days per week.

The company is still reducing space, confirming to the Business Journal in June 2023 that it was adding 330,000 square feet of office space to the market, all of it located along I-90. The affected office parks were 90 North and Sunset Corporate Campus.

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Anthony Bolante | PSBJ

One of the reasons T-Mobile gave for shifting more employees out of those offices was a growing number of employees based in the renovated headquarters and the need for in-person collaboration — while also offering free lunch.

A T-Mobile employee speaking on condition of anonymity told the Business Journal the offices given up weren’t ideal spaces. The amenities didn’t match those offered at the company’s headquarters just to the west.

T-Mobile’s space, unlike Microsoft’s, was broken up into smaller chunks, the biggest of which was 175,000 square feet spread across three buildings.

Boeing had at least 4,364 employees based in Bellevue at its Woodlands office campus 10 years ago, according to data obtained from the city through a public records request. They were mostly administrative and corporate roles.

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Anthony Bolante | PSBJ

But between 2014 and 2020, Boeing began moving them out. The data from the city shows Boeing’s Bellevue headcount dropped to 3,179 in 2016, then to 1,707 in 2018 and reached zero by 2020.

In the third quarter of 2023, Boeing let the 700,000-square-foot Woodlands lease expire, driving the entire Eastside’s vacancy rate up by over 2 percentage points, according to a 2023 third-quarter office market report from the Broderick Group.

Related coverage: More than a dozen office buildings in Seattle area sit completely empty

Leaving the office

Thanks to the Woodlands and Advanta Office Commons lease expirations, Bellevue’s top employer list looks vastly different than it did a decade ago.

Microsoft’s workforce in the city is plummeting. After having over 9,300 Bellevue employees at the end of 2021, the company had 6,700 at the end of 2023, according to the city. Public records obtained from the city showed that over 2,000 employees were based at Advanta as of early 2020.

Bellevue’s current largest employer, Amazon, is bolstering that decreasing workforce number by moving more than 11,000 roles to the city so far. However, the growth is concentrated within a few blocks of downtown Bellevue, and the company hasn’t signaled any desire to move along I-90.

While leasing activity in the region is picking up, companies aren’t looking at the massive leases they were a decade ago.

“We are seeing some leasing activity and the number of leases is not down by much; however, what we are seeing is fewer renewals,” said Elliott Krivenko, director of market analytics for CoStar in Seattle. “A lot of companies seem to be consolidating space, as is the case with Microsoft and Costco. At the end of the day though total occupied space continues to decrease, and the leases that are getting signed tend to be smaller in size.”

Kraft expects to see more adaptive reuse, as well as redevelopment, for several office properties near Eastgate in the years ahead.

If properties are shifted from office buildings to other uses, that could help shrink the vacancy, which could bring more retail offerings to attract new tenants.

“If this doesn’t happen, we should see lease rates continue to fall along the corridor to make it a more compelling value compared to downtown Bellevue, close-in suburban Bellevue or the 520 corridor,” Kraft said.

One redevelopment could happen soon. Bellevue city permit application records show a plan to knock down a 70,994-square-foot office building at 3245 158th Ave. SE and build 83 townhomes.

The project’s application, which was filed last November, proposes a residential community consisting of 15 primarily four-story buildings with two-car garages and two outdoor courtyards.

The office building used to hold a Verizon regional corporate office with hundreds of employees, according to city records.

For now, brokers with CBRE are marketing the space for office use and trying to attract tenants who haven’t yet taken the other empty buildings.

“I also wouldn’t discount the possibility of a major tenant taking a huge swath of space along I-90 at some point,” Kraft said. “The thing we tend to forget is that it may only take one or two leases to swing sentiment in the other direction.”