Big tech is downsizing work space in another blow to office real estate

livemint.com:

Big technology companies are cutting back on office space across major coastal cities, leaving some exposed landlords with empty buildings and steep losses. The pullback marks a sharp reversal after years when companies such as Amazon.com, Meta Platforms’ Facebook and Google parent Alphabet had been bolstering their office footprints by adding millions of square feet of space. Their expansion continued even after the pandemic erupted and many employees started working remotely.

Tech companies have been the dominant tenant in West Coast cities like Seattle and San Francisco, and by 2021 these companies came to rival those in the finance industry as Manhattan’s biggest user of office space. Now, big tech companies are letting leases expire or looking to unload some offices. Amazon is ditching or not renewing some office leases and last year paused construction on its second headquarters in northern Virginia.

Google has listed office space in Silicon Valley for sublease, according to data company CoStar. Meta has also dumped some office space and is leasing less than it did early on in the pandemic. Salesforce, the cloud-based software company, said in a recent securities filing that it leased or owned about 900,000 square feet of San Francisco office space as of January.

That is barely half the 1.6 million of office space it reported having in that city a year earlier. Tech giants looking to unload part of their workplace face a lot of competition. Office space listed for sublease in 30 cities with a lot of technology tenants has risen to the highest levels in at least a decade, according to brokerage CBRE.