Tech companies like Meta, Amazon, Salesforce and Google are selling office space and letting leases expire.
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Big tech companies are cutting back on previously huge demand for office space, exacerbating concerns among commercial landlords.
according to a report wall street journal, Big tech companies like Meta, Amazon, Salesforce and Google are selling off office space and letting leases expire as the popularity of remote work appears to be permanently entrenched in the tech industry.
Google has listed its Silicon Valley office space for sublease, Meta is getting rid of office space, and the lease volume is less than at the beginning of the epidemic. Salesforce said in a recent filing that it leases or owns 900,000 square feet of office space in San Francisco—— Just a year ago, Amazon accounted for nearly half of the 1.6 million square feet of office space it owned in the city — and Amazon chose not to review several office leases and paused construction on its Virginia headquarters.
Tech companies’ move out of office space marks a reversal from their attitudes early in the pandemic. Amazon, Meta and Google had been expanding their office space before the pandemic, and have continued the process even as employees began working remotely, adding millions of square feet of space. Tech companies compete with Manhattan’s financial industry for office space consumption.
This retreat threatens the financial health of cities, many of which benefit greatly from tech companies’ demand for office space and the influx of well-paid workers they often bring with them. It’s also a major blow to office landlords, who are already dealing with the threat of higher interest rates and a parallel decline in demand for space from law firms, financial services companies and other corporate tenants.
Declining tech demand has hurt the valuations of some office towers, such as 1800 Ninth Avenue in Seattle, which tripled in value as Amazon began paying rent in 2013, when the e-commerce giant Down about two-thirds of the office building.
At the end of Amazon’s first year in the building, it sold for $150 million, nearly double the $77 million it sold for two years ago, according to Amazon. Magazine. Its price continued to climb and it was sold again to J.P. Morgan Asset Management in 2019 for $206 million.
However, Amazon’s lease is about to expire this year and it is expected to move out. The building is reportedly on the market again and is expected to sell for just a quarter of its 2019 price.
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