Facebook parent Meta and Microsoft are separately evacuating office buildings in Washington’s Seattle and Bellevue — in the latest sign of change in the tech sector and softness in the office market here — according to the Seattle Times.
Facebook on Friday confirmed plans to sublease its offices in the six-story Arbor Block 333 in downtown Seattle and in the Spring District’s 11-story Block 6 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 in the economic cycle characterized by more sellers than buyers and low prices.
The Seattle Times said on 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 expires in June 2024.
The Seattle Times said the announcements come as the continued popularity of remote working and a tech slowdown with mass layoffs have reduced demand for office space in Seattle and elsewhere.
Both Meta and Microsoft have embraced remote working as they downsize their workforce as the tech sector swoons, the daily reported. In November, Meta announced the layoff of 726 workers in the Seattle area.
Meta spokesperson Tracy Clayton told the Seattle Times that the leasing decisions were primarily driven by the company’s shift to remote or “distributed” work. But he acknowledged that, “given the economic climate,” Meta also “tried…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 employees in the Seattle area, which remains the company’s second-largest tech center outside of its Menlo Park headquarters, Clayton said.
A Microsoft spokesperson characterized his decision on City Center Plaza as part of an ongoing review of the company’s “real estate portfolio to ensure we provide an exceptional workplace and create greater collaboration and community for our employees.”
The City Center Plaza decision also comes amid a massive remodel of Microsoft’s Redmond campus, part of which will be completed by the end of 2023. economic headwinds and the slow return of homeworkers.
That struggle is most visible in downtown Seattle, where overall office vacancy rates are now 25 percent, according to a new report from commercial real estate firm Colliers.
The Seattle Times said even non-vacant offices are often half-empty because of remote work. As of last summer, downtown Seattle has only about 40 percent of pre-pandemic workers present, according to mobile phone location data from Placer.ai, posted by the Downtown Seattle Association.
(Except for the headline, this story has not been edited by NewsMadura staff and is being published from a syndicated feed.)
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