According to the Seattle Times, California: Facebook parent Meta (Microsoft) and Seattle's office buildings are being vacated by the two companies. This is the latest sign that the market has changed and the technology sector is changing.
According to the Seattle Times, Facebook confirmed Friday that it plans to sublet its offices in the six-story Arbor Block 333, downtown Seattle, and the 11-story Block 6 in Bellevue's Spring District, according the Seattle Times.
Social media company Menlo Park, California based said it is reviewing leases for other Seattle office buildings. A soft market is an economic phase that has more buyers than sellers and lower prices.
The Seattle Times reported that Redmond-based Microsoft confirmed that it would not renew its lease at 26-story City Center Plaza, Bellevue, when the lease expires in June 2024.
According to the Seattle Times, the announcements are due to the increased popularity of remote work as well as a slowdown in tech with large layoffs that have both reduced demand for office space in Seattle.
According to the newspaper, both Microsoft and Meta have adopted remote work while reducing their workforces in the face of the slumping tech sector. Meta announced in November that it would lay off 726 workers from the Seattle area.
Tracy Clayton, a spokesperson for Meta, stated to the Seattle Times that leasing decisions were driven primarily by the company's shift toward remote work. He acknowledged, however that Meta was "attempting to be financially prudent" given the current economic climate.
Meta currently occupies Arbor Block 333 in Seattle. It would have occupied Block 6, which is expected to open later in the year. Clayton stated that the company has 29 offices and almost 8,000 employees in Seattle, which is still the second-largest engineering hub after Menlo Park.
Microsoft spokeswoman said that the decision to purchase City Center Plaza was part of an ongoing review of the firm’s real estate portfolio. This evaluation aimed to "ensure we provide exceptional places to work and foster greater collaboration and community among our employees."
The City Center Plaza decision comes amid massive renovations of Microsoft's Redmond campus. Part of this project will be completed in 2023. The daily newspaper stated that Friday's news is a further negative for the Seattle office market, which is struggling against economic headwinds as well as the slow return of remote workers.
According to Colliers, a new report on office vacancy in Seattle shows that downtown is the most affected.
According to the Seattle Times, even vacant offices can sometimes be half-empty due to remote work. According to Placer.ai data, only 40% of workers in downtown Seattle were present prior to the pandemic. This information was provided by the Downtown Seattle Association.
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