Due to the transition to hybrid work and the general decline in the tech industry, Meta and Microsoft are both giving up office space in the Seattle area.
Facebook parent company Meta is subleasing both Block 6, a 325,000 square-foot facility at the Spring District complex in Bellevue, Wash., east of Seattle, and its 6-story space at the Arbor Blocks 333 skyscraper close to downtown Seattle. It’s a rapid reversal from Meta. The business, which has many properties, established new offices in the Spring District in October.
Since opening a location in Seattle back in 2010, Meta has expanded steadily in the area, where it now employs close to 8,000 people. After its Menlo Park headquarters, the Seattle region is Meta’s second-largest engineering hub. It was announced by Meta on the company’s third-quarter results call that a reduction in real estate footprint was anticipated. The business supports working remotely.
It was also reported that Microsoft would not be renewing its lease at a 561,494-square-foot facility in downtown Bellevue, Washington. A hybrid workspace approach, which Microsoft has introduced, provides additional flexibility for remote work.
Many tech organizations are re-evaluating their current real estate footprint and future plans as they implement permanent hybrid work strategies. The headline of a CBRE report from the fourth quarter that highlights the real estate market in the Seattle area says, “Office space reset leads to lease impasse.”
According to CBRE research, office building occupancy in downtown Seattle climbed from 15-20% to 35-60% in November of last year as more businesses enforced in-office requirements. However, the region’s overall vacancy rates went up from about 16% at this time last year to over 18%. According to the survey, only a “trickle” of IT tenants renewed their contracts downtown in Q4.
