Number of Empty Offices In Seattle Keeps On Increasing
In separate announcements, tech giants – Microsoft and Meta have revealed that they would be vacating their offices in Seattle and Bellevue. The popularity of Work From Home and an overall slowdown in the tech sector are said to be the main reasons behind this rationalisation of office spaces by Meta and Microsoft.
Meta To Sublease Its Office Space
Meta’s flagship Arbor Block 333 – a class A office building in Seattle is about to get subleased by the company. The six-storey building is entirely occupied by the IT giant as of now. However, that’s going to change soon. Similarly, it has decided to sublease its Block 6 office building in Bellevue.
Meta has also backed out of the plan of occupying 33 floors of a flagship skyscraper in Austin, which once completed would become the tallest skyscraper in the city. The tech giant is now planning to sublease this office space instead of occupying it.
There are two reasons behind this sudden rationalisation of real estate. First, it’s true that companies initially tried to force employees into the office, but they soon realised that enforcing their WFO rule would mean losing some of the brightest employees. This is why most companies, including Meta, have chosen the middle ground of the hybrid work process.
However, Meta, like other tech giants is concerned with the looming recession and an already happening slowdown in the sector. Tracy Clayton, the company’s spokesperson, accepted that the decision to rationalise office space is their way of being “financially prudent.”
Microsoft Is Leaving Seattle As Well
Microsoft, too, has announced that it will not be renewing its office space lease in Bellvue’s City Centre Plaza tower. The total office space owned by MSFT in the tower amounts to 561,494 square feet. Apart from City Centre Plaza, the company is going to give up its 585,000 sq. feet of office space in Advanta Office Commons, and 396,039 sq. feet of office space in 90 East Sammamish Park buildings C and D, It is believed that Microsoft will also give up a portion of its office space in Lincoln Square North.
Microsoft Will Compensate for this Loss of Office Space With Its Expanded Office Space At Redmond
Although Microsoft will be giving up almost 1.7 million square feet of its old office space in and around Bellevue, it will be adding 2.5 million extra office space to its Redmond campus. Redevelopment work in its Redmond campus has been going on for 3 years now, and it is almost finished. The redesigned campus will entirely compensate for the loss of office space in Bellevue.
Pressure on Seattle
With more and more companies giving up their lease, it seems Seattle is in for a severe economic downturn. Although most commercial leases are long-term in nature, and hence these empty office buildings will still generate revenue for Seattle in the near term. However, a day will come when these contracts will come to an end. Companies and authorities in Seattle have to aggressively hunt for new tenants to avoid the collapse of the lease economy.