``We've signed a five-year lease on the retail space,'' Microsoft spokeswoman Tami Begasse said. ``The team is running out of space and is relocating to maintain team camaraderie that they've had since moving from Chicago.''

Kirkland city officials said the move is a mixed blessing: It dashes hopes of some city officials who envisioned a bold, mixed-use transit center on the property.

On the other hand, it's Microsoft that's moving in.

``The creative energy that will bring to our downtown is very exciting,'' City Manager Dave Ramsay said. ``This coupled with the recent arrival of Google says good things about the downtown.''