Microsoft leaves office space in Morrisville as company moves to consolidate leases

Microsoft has reduced its footprint in the Triangle area after the tech giant ended its lease for roughly 39,000 square feet at the Perimeter Park campus in Morrisville, a source familiar with the move told The News & Observer.

The company also seeks to sublease about 20,000 additional square feet in the same building, called Perimeter Four, while retaining approximately 190,000 square feet at its separate location in the same office complex.

Microsoft’s decision to vacate a floor of Perimeter Four on Carrington Mill Boulevard was permitted under its lease agreement. While the company did not respond to the N&O’s questions about this choice, Microsoft stated in its latest annual financial filing it has sought “to consolidate our office leases to create higher density across our workspaces.”

The Redmond, Washington-based company moved its North Carolina team to Perimeter Park in 2016. Located off Interstate 40 near Raleigh-Durham International Airport, the complex is managed by Trinity Capital Partners, which is also developing the Spark Life Science complex in Morrisville.

In December 2019, North Carolina awarded Microsoft an economic incentive to create 500 new jobs in Morrisville, most in software development, two months after the company received another state incentive to add more than 400 jobs in Charlotte. But in March 2022, Microsoft said it would cancel both of these jobs deals, citing North Carolina’s demand for hiring information.

“The amount of employee data requested to validate job creation metrics is more than Microsoft is willing to share,” Michael Shelton, the company’s director of real estate, wrote in a letter to North Carolina Commerce Secretary Machelle Baker Sanders.

At the time, Shelton said Microsoft had more than 2,500 full-time employees in the state. The company declined to share its current North Carolina workforce figures. It continues to lease out a larger office space at 1009 Think Place in Morrisville. The Triangle Business Journal first reported on Microsoft’s terminated lease earlier this week.

Since the pandemic, major technology companies like Meta, Google and Salesforce have joined Microsoft in reducing space. Locally, office vacancy rates remain high compared to previous years; in a report released Wednesday, the commercial real estate investment firm CBRE found total vacancy in the Raleigh-Durham area is at 19.3%, up from around 12% in 2020.

“It shows in a post-COVID economy, more companies aren’t having employees come back,” said Morrisville council member Steve Rao. “We’re going to have to think outside the box on how to use these spaces.”

In December, IBM sold a four-building office complex near Research Triangle Park to the real estate firm Hines Global Income Trust, which has built the mixed-use projects Fenton In Cary and Durham’s Market District at American Tobacco. For now, IBM remains the tenant of the entire space.