Facebook parent Meta and Microsoft are separately vacating office buildings in Seattle and Bellevue in 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 the six-story Arbor Block 333 in downtown Seattle, and the 11-story Block 6 in the Spring District in Bellevue, the Seattle Times reported.
The Menlo Park, California-based social media giant said it is also reviewing leases for other office buildings in the Seattle area. A soft market is a phase of the business 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 will not renew its lease on the 26-story City Center Plaza in Bellevue when that lease ends in June 2024.
The Seattle Times said the announcements come as the continued popularity of remote work and a technology slowdown with mass layoffs have reduced demand for office space in Seattle and elsewhere.
Both Meta and Microsoft have embraced remote work while cutting their workforces as the tech sector falters, according to the newspaper. 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 driven by the company’s move toward remote or “distributed” work. But she acknowledged that “given the economic climate,” Meta was also “trying to be … financially prudent.”
Meta currently occupies all of Arbor Block 333 in Seattle and would have occupied all of Block 6, which is scheduled to open later this year. The company still has offices in 29 buildings and nearly 8,000 workers in the Seattle area, which remains the company’s second-largest engineering center outside its Menlo Park headquarters, Clayton said.
A Microsoft spokesperson characterized its decision on City Center Plaza as part of an ongoing evaluation of the company’s “real estate portfolio” to ensure we provide an exceptional place to work and create greater collaboration and community for our employees.
The City Center Plaza decision also comes amid a massive redevelopment of Microsoft’s Redmond campus, part of which is due to be completed by the end of 2023. But the newspaper said Friday’s news adds to an already pessimistic forecast for the Seattle-area office market as it battles economic headwinds and the slow return of remote office workers.
That struggle is most visible in downtown Seattle, where total office vacancy now stands at 25 percent, according to a new report from commercial real estate agency Colliers.
The Seattle Times said that even offices that are not vacant are often half empty due to remote work. As of last summer, downtown Seattle has only about 40 percent of workers present before the pandemic, according to Placer.ai cell phone location data published by the Downtown Seattle Association.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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