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May 06, 2016

Rumors swirl about big lease at new Bellevue tower for game developer Valve

Puget Sound Business Journal

Marc Stiles

Video game developer Valve Corp. has leased a large industrial space in Kirkland, and now real estate brokers are buzzing about it leasing a significant amount of office space in Lincoln Square tower, which is under construction in Bellevue.

Real estate company Benaroya on Tuesday tweeted that Valve has leased 147,040 square feet of office and warehouse space at Benaroya's Totem Lake Commerce Center in Kirkland. The space was formerly occupied by another video game maker, Nintendo, according to Bellevue real estate broker Jeff Chaney. Benaroya officials did not respond to a request for comment.

Chaney, of Kidder Mathews, added there's a rumor that Valve has signed a letter of intent to lease space in the 31-story Lincoln Square tower. The rumor has been making the rounds.

"I've been hearing it from a ton of people," added Bret Jordan, another Bellevue real estate broker with Colliers International.

Chatter among brokers is that Valve is taking between 200,000 square feet and 250,000 square feet in the tower. It would be the first major lease for the 710,000-square-foot tower, which has signed two smaller deals, including one with former Microsoft CEO Steve Ballmer.

A Valve spokesperson did not respond to email inquiries. Real estate broker Paul Sweeney of the Broderick Group is marketing space for lease in the Lincoln tower. He declined to comment.

Valve got its start as a game developer, creating "Half-Life 2," "Left 4 Dead 2" and the popular "Dota 2." The company organizes live video game competitions that thousands of people attend to watch contestants compete for millions of dollars in prizes. Valve also makes Steam, an online platform where more than 125 million people last year browsed to buy games. Lionsgate (NYSE: LGF) recently became one of the first major studios to license films to Steam. Valve also has forged a partnership Taiwan mobile and virtual reality company HTC.

The company is growing and needs to act soon. Its current lease in Bellevue's Skyline Tower runs until early 2018, according to industry sources. Valve occupies 110,000 square feet in Skyline, and for about a year there has been talk among brokers that the company will double the amount of office space it has.

What Valve will do with its new space in Kirkland wasn't known, but Chaney said the lease may be related to its partnership with HTC.

HTC is launching a $100 million accelerator program for startups to encourage them to make virtual reality products using the HTC Vive virtual reality platform, which was developed through the partnership between HTC and Valve.

In addition to providing financial and other support, the accelerator will provide startups with office space.

For the full story, go to Puget Sound Business Journal.

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