A multifamily developer plans to build hundreds of apartments at a site being sold by Microsoft, as the tech giant embarks on a project to expand and modernize its massive corporate headquarters near Seattle in Redmond.
American Capital Group, based in Bellevue, plans to buy and demolish a vacant office building at 3050 152nd Ave. NE near the Microsoft corporate campus in Redmond, American Capital CEO BJ Kuula told CoStar News in an email. The developer is planning a 641-unit multifamily project at the site across the street from the Link light-rail network’s new Redmond Technology Station.
Microsoft and other big tech companies such as Amazon, Apple, Google parent company Alphabet and Facebook parent Meta have shed office space and consolidated operations following thousands of job cuts over the past two years. In a move that signals its commitment to physical space, however, Microsoft recently shelled out $330 million to acquire an office it has been leasing in Silicon Valley.
Microsoft is consolidating operations from across the Puget Sound region at its refreshed headquarters campus in Redmond, due to be completed in phases starting next year.
American Capital expects to close the purchase of the Microsoft site by the end of next year and break ground on the development, to be built in two phases, in early-to-mid 2026, Kuula said. The transaction was earlier reported by the Daily Journal of Commerce.
Microsoft has been planning to sell the 113,391-square-foot building since last year, and CBRE listed the property last spring.
The tech giant built the offices in 1982, a period when the company was in the early stages of establishing its headquarters as it ramped up growth to eventually become one of the world’s dominant computing and software companies.
American Capital has been an active multifamily developer in greater Seattle. The company, focused on transit-oriented projects, recently started a 316-unit project with retail and coworking space in Lynnwood, north of Seattle, with plans to open in the summer of 2026.
Affluent enclave
Redmond has been one of the Seattle region’s strongest suburban apartment markets for years. The average asking rent in the wealthy tech enclave has grown nearly 6% over the past 12 months, compared to a growth rate of 2.2% for the greater Seattle region, according to a CoStar analytics report.
Microsoft's consolidation and the new transit lines connecting Redmond to job centers in Bellevue and Seattle should keep apartment demand strong in the area, according to the report.
The property being acquired by American Capital for the apartment project and transit station are on the east side of state Route 520, connecting to Microsoft's West Campus by a pedestrian bridge.
“We are bullish on Redmond and the rest of the innovation triangle,” an area that also includes Bellevue and Kirkland, Kuula told CoStar News.
Microsoft occupies roughly two-thirds of Redmond’s office stock, according to CoStar analytics. The tech company has been steadily giving back leased space across the Puget Sound region, including Redmond and neighboring Bellevue, as it moves toward centralizing its employees in its refreshed main campus.
Microsoft is letting leases expire on about 1.7 million square feet of offices in downtown Bellevue.
Even as it consolidates in its Puget Sound home base, Microsoft has spent billions to develop data centers across the United States and around the world.
It is also strengthening its presence in such tech strongholds as the Silicon Valley, south of the San Francisco Bay Area.
Microsoft's recent $330 million office deal in Mountain View marked one of the Bay Area’s largest real estate sales of the year ranked by total price.