Microsoft Submits Plans for CA Campus Expansion

Microsoft has submitted plans to the city of Mountain View, California to modernize and enlarge the Microsoft Technology Center campus in Mountain View by about 25%. Microsoft, which currently occupies about 515,700 square feet of leased space in the five buildings on the 32-acre campus, first moved into the space in 1981 when it was developed. The company currently houses roughly 2,000 employees at the Mountain View Silicon Valley Campus, but by the end of expansion could add another 3,000 employees to the complex.

"A little more than 15 years ago, we opened our Silicon Valley Campus in Mountain View, bringing together the innovation and energy of engineers from WebTV, Hotmail and PowerPoint, to name a few," Qi Lu, an executive vice president with Washington state-based Microsoft, said in an open letter to employees. "We submitted a proposal to the City of Mountain View to acquire our Mountain View Silicon Valley Campus and build a state of the art facility to create an exceptional place to work."

"The employees are working on initiatives including Xbox, Outlook.com, Skype and Yammer," added Emily Horn, a Microsoft spokeswoman. Right now, Skype and Yammer have their own headquarters in Palo Alto and San Francisco respectively; the expansion could allow these employees to move to the expanded Mountain View campus.

"Today's announcement marks the very beginning of a longer-term process," Lu said. "There is no immediate impact to teams in the Bay Area, and we anticipate that construction will take at least three years to complete."

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Office Spaces Backing Out of Cubicles

A new article from the Wall Street Journal titled More New York Companies Experiment With Innovative Office Space takes a look at one of the newer trends in office organization and layout that's doing away with cubicles and offices in favor of open and collaborative spaces. Just last week, Gerson Lehrman Group Inc. (GLG), for example, launched its new office design that offers an array of workspaces — from comfortable couches to high stools at a barista-staffed coffee bar to single-occupancy glass booths — and does away with permanent desks, assigning employees only a laptop, a headset and a locker.

"Something funny about having a lot of stuff is it makes you feel like you're doing something," said Alexander Saint-Amand, CEO of GLG, whose company helps other firms learn about business issues by matching them with experts. "But when you don't have all that stuff, it frees you up to actually concentrate and work."

An excerpt of the article follows:

Companies such as Microsoft, PricewaterhouseCoopers and Accenture have been experimenting with variations on unassigned seating since the 1990s and early 2000s. The Macquarie Group drew much attention in 2009 when it instituted an activity-based working concept at one of its offices, for 3,000 workers, in Sydney, Australia.

Last year, real estate services company CBRE Group Inc. brought its version of the office design to its Los Angeles operation. CBRE said it planned to have the system in 21 of its offices by year's end.

"When we actually looked at what they needed, they needed much more choice, the ability to make good decisions about getting their work done," said Lenny Beaudoin, CBRE senior managing director of workplace strategy.

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Amazon's Global HQ for Sale

Microsoft co-founder Paul Allen's Vulcan Real Estate announced last Thursday that it would be putting Amazon.com Inc.'s 11-building Seattle headquarters on the market with plans to use the proceeds for other real estate projects in the area. "We have been deeply involved in the redevelopment and revitalization of South Lake Union for over a decade, and the sale of the Amazon campus will allow us to continue to invest in the neighborhood and the community," Ada M. Healey, vice president of Vulcan's real estate unit, said in the statement.

"Vulcan's portfolio is heavily weighted in office and we need to rebalance that distribution," Lori Mason Curran, Investment Strategy Director of Real Estate at Vulcan said in a statement. "With the current low interest rate environment and high values for core assets this feels like a good time to capitalize on market conditions."

Built in the former warehouse district north of downtown, the 1.8 million square foot campus is being listed for sale through CBRE Group Inc. While no asking price was listed, industry experts expect the property to sell for more than $1 billion. According to a Reuters report, Amazon, which only recently moved into its new headquarters, declined comment on whether it would be a bidder to buy the 11 buildings on 1.8 million square feet of land which make up its headquarters. Amazon already has plans to build new offices nearby to house its growing staff.

"If they're going to take the cash and use it to do more development in South Lake Union, I see it only as a good thing," commented Jerry Dinndorf, president of the South Lake Union Community Council.

"The Amazon corporate headquarters buildings represent exactly what core capital wants today: new product featuring durable, credit income streams in great CBD locations. Markets like South Lake Union in Seattle, South of Market in San Francisco and Silicon Beach in Santa Monica, command premium rents because of huge tenant demand," said Kevin Shannon of CBRE in a CoStar Group report. "Technology and corporate tenants love state of the art campuses in amenity rich, transit oriented environments like Amazon's because these locations allow them to attract and retain the best talent in the workforce."

For more news and information visit Blumberg Capital Partners.