Facebook parent Meta and Microsoft are separately vacating office buildings in Seattle and Bellevue, Washington — in the latest sign of change in the tech sector and weakness in the office market here, according to the Seattle Times.
Facebook on Friday confirmed plans to sublet its offices in downtown Seattle’s six-story Arbor Block 333 and the 11-story Block 6 of the Spring District in Bellevue, the Seattle Times reported.
The Menlo Park, Calif.-based social media giant said it is also reviewing leases for other office buildings in the Seattle area. A soft market is a phase in the economic cycle characterized by more sellers than buyers and low prices.
The Seattle Times said the same day that Redmond-based Microsoft confirmed reports that it would not renew its lease on the 26-story City Center Plaza in Bellevue when that lease expires in June 2024.
The Seattle Times said the announcements come as the continued popularity of remote work and a slowdown in technology with massive layoffs have reduced demand for office space in Seattle and elsewhere.
According to the daily, both Meta and Microsoft have embraced remote work while reducing their workforces while the tech sector swoons. In November, Meta announced the layoff of 726 Seattle-area workers.
Meta spokeswoman Tracy Clayton told the Seattle Times that the leasing decisions were primarily due to the company’s shift to remote or “distributed” work. But he acknowledged that Meta was also “trying to … be financially prudent, given the economic climate.”
Meta currently occupies the entire Arbor Block 333 in Seattle and would have occupied the entire Block 6, which is slated to open later this year. The company still has offices in 29 buildings and nearly 8,000 employees in the Seattle area, which remains the company’s second largest engineering center outside of its Menlo Park headquarters, Clayton said.
A Microsoft spokesman said its decision to select City Center Plaza was part of an ongoing evaluation of the company’s real estate portfolio “to ensure we offer an exceptional place to work and create better collaboration and community for our employees.”
The decision to select City Center Plaza also comes amid a massive transformation of Microsoft’s Redmond campus, part of which will be completed in late 2023. However, Friday’s news added that Friday’s news adds to an already bleak outlook for the Seattle-area office market as it battles economic headwinds and the sluggish return of remote office workers.
That struggle is most evident in downtown Seattle, where overall office vacancy rates now stand at 25 percent, according to a new report from commercial real estate agency Colliers.
The Seattle Times said even non-vacant offices are often half-empty due to remote work. Only about 40 percent of pre-pandemic workers are present in downtown Seattle as of last summer, according to Placer.ai cellphone location data released by the Downtown Seattle Association.
(Except for the headline, this story was not edited by NDTV staff and was published by a syndicated feed.)
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