In a long-rumored deal, the software giant will occupy all of the office space City Center Plaza, a 26-story which is under construction.

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Microsoft will lease all of the office space in another downtown Bellevue tower.

Spokesman Lou Gellos said today that the software giant plans to lease the space in the 26-story City Center Plaza, under construction at Northeast Sixth Street and 110th Avenue Northeast.

The lease will help alleviate a space crunch at Microsoft’s Redmond campus, where a number of buildings are under construction, Gellos said. It also will allow the company to bring together teams that now work at scattered locations.

City Center Plaza, being built by Wright Runstad and Beacon Capital Partners, contains 570,000 square feet. Until now, the developers has announced just one tenant, El Gaucho steakhouse.

Microsoft occupies 317,000 square feet at Lincoln Square in downtown Bellevue, and last year announced that it would lease 1.3 million square at two other projects under construction in the city.

Of that, 740,000 square feet is at The Bravern mixed-use complex not far from City Center Plaza. The buildings are “a stone’s throw apart,” Gellos said.

When all the space is occupied, Gellos said, Microsoft will be Bellevue’s largest employer.

Rumors of Microsoft’s interest in City Center Plaza had been circulating among commercial real-estate brokers for months. If the lease happened, they said, it would be a sign that Microsoft plans to continue hiring in the Seattle area.

The City Center Plaza lease has broad real-estate ramifications. It could drive lease rates in downtown Bellevue — already high — even higher, and vacancy rates still lower. It also could provide an incentive for more planned office projects to break ground in downtown Bellevue.

Eric Pryne: 206-464-2231 or