In 2007, Expedia punctuated a Bellevue real-estate boom, following in the footsteps of Eddie Bauer and Microsoft in announcing it would lease office space in a new downtown skyscraper. CEO Dara Khosrowshahi said the decision to keep headquarters in Bellevue was made in large part to appease employees currently living on the Eastside. It chose downtown to put employees closer to a “bevy of food options, several fitness centers, day-care facilities and retail shops” for the company’s large Eastside-dwelling contingent, he told The Seattle Times then.
Earlier Thursday, Khosrowshahi helped fortify a Seattle tech-industry boom, announcing that Expedia will purchase Amgen’s campus on Elliott Bay for $228.9 million in cash and will relocate its headquarters there by 2018. While the company’s 2007 decision was made with its current employees in mind, this latest relocation will cater to those who haven’t yet joined the company.
“Bellevue has been a great home for us, and it was a tough decision to leave Bellevue, but the opportunity to own an iconic waterfront headquarters was, for us, too good to pass up,” Khosrowshahi said in a press conference Thursday at Seattle City Hall. “We think it will be a magnet for top talent, and believe me, we’re on the search for top talent.”
The move is an obvious blow to downtown Bellevue. Three thousand employees will eventually depart 500,000 square feet of office space, taking loads of disposable income with them. But the Expedia Building, or whatever it will later be called, isn’t going away, and that office space likely will be filled. Expedia’s biggest blow to Bellevue was reminding companies, current and prospective, that Bellevue is a suburb.
Bellevue City Manager Brad Miyake said in a statement that Expedia’s move was “a real estate decision — pure and simple.” Khosrowshahi echoed that sentiment, saying there were no campuses like Amgen’s on the Eastside, but he also acknowledged that “Seattle is a place where a lot of technology talent wants to live, so a Seattle address was certainly a positive.” There’s a reason many Eastside companies label themselves as Seattle-based in their marketing materials: Applicants from San Francisco, Austin, or New York likely don’t know where Bellevue, Kirkland, or Renton are.
From 2007 to present, it was easy to get swept up in the Bellevue-as-big-city vibe. Downtown doesn’t look like a suburb, and having a nameplate like Expedia’s on the side of a building adds clout to an area. But while Bellevue was adding office space and companies, big-name technology companies such as Facebook, Amazon, and Google were solidifying their Seattle footprint, and Alibaba is reportedly considering Seattle for its U.S. headquarters. Silicon Valley is building a foothold in the Puget Sound to access talent, but it’s doing so in Seattle, not Bellevue.
Expedia is not the only company with a significant presence downtown, but it is the largest technology company headquartered there. Khosrowshahi said Thursday his company has enjoyed its time in Bellevue, but with Expedia leaving, it’s fair for other companies to ask whether a Bellevue address is an asset, something current tech residents such as Microsoft, Valve, and Concur might consider for themselves. Tech companies want young workers, young workers want vibrant cities, and Expedia just sent a strong message that it would prefer a relatively bland, albeit scenic, Seattle area over the most vibrant area of the Eastside.
The campus choice is an unusual one. Expedia’s move to downtown Bellevue in 2008 was to provide more amenities for a workforce that largely lived on the Eastside. Khosrowshahi said 75 percent of Expedia employees still live on the Eastside, and the area around Amgen’s campus is devoid of restaurant and entertainment options. Furthermore, mid-size companies of Expedia’s ilk are increasingly choosing downtown locales, both in the Puget Sound area and Silicon Valley.
Expedia’s new office will be big — 750,000 square feet on 40 acres — and will take a significant amount of remodeling. The campus was designed for a biotech firm, so it’s filled with labs and specialized equipment that will be of no use to Expedia. That means the $230 million purchase price will climb as Expedia customizes, and expands, its new headquarters.
That said, Expedia’s clearly trying to get big — the Amgen campus purchase follows a $2.5 billion acquisition spree, and the company plans to grow its headquarters workforce by 1,500. Expedia thinks it will reach the realm of the campus-worthy tech giants. It just won’t do it on the Eastside.