As office rentals drop significantly in the city of San Francisco amid remote work and massive layoffs, Meta (formerly Facebook) and Microsoft are now vacating office buildings in Seattle and Bellevue in Washington State.
The Seattle Times reported that Meta is reviewing “leases for Seattle-area office buildings.”
Facebook has confirmed plans to sublease its offices in downtown Seattle and in the Spring District in Bellevue.
Microsoft also confirmed that it won’t renew its lease at the 26-story City Center Plaza in Bellevue when that lease ends in June 2024, the report mentioned.
The ongoing work-from-home and layoffs have cut into demand for office space in Seattle and other tech cities in the US.
In November, Meta announced layoffs of 726 Seattle-area workers.
A Meta spokesperson said that given the economic climate, it is trying to be financially prudent.”
The Seattle office market is now struggling “where total office vacancy now stands at around 25 per cent,” according to a report by commercial real estate agency Colliers.
Even non-vacant offices are often half empty, owing to remote work.A
“Given the macroeconomic conditions and the hybrid work trend, we believe we’ll see an uptick in office vacancy over the next couple of quarters,” Connor McClain, senior vice president and leasing expert at Colliers,” was quoted as saying in the report.
Twitter CEO Elon Musk said last week that office rentals in San Francisco will drop further.
David Sacks, Co-founder and partner at Craft Ventures, tweeted that he got offered office space in San Francisco for the same price as 2009.
Musk replied: “It will go lower”.
Twitter has also been sued for failing to pay $136,250 as rent for one of its office spaces in San Francisco, and is vacating office spaces in Singapore and India.
The company’s headquarters are located at 1355 Market St, where Twitter has also reportedly fallen behind on rent.
Amid global recession fears, San Francisco stands to lose the most as work-from-home in the last three years of the pandemic at tech companies and expensive real estate has stalled the city’s growth.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Sun, January 15 2023. 11:42 IST