US tech giants, grappling with a post-pandemic slowdown, have already laid off tens of thousands of workers. Now they’re dumping millions of square feet of office space, pushing vacancies in city centers to record highs and ratcheting up pressure on the commercial real estate industry. From a report:No sector is looking to sublease more office space than Big Tech, according to Jones Lang LaSalle Inc. Alphabet, Meta Platforms, Microsoft and Amazon.com have all announced plans to reduce their office footprint. Amazon has paused construction at a new campus near Washington, DC, and Microsoft is reevaluating plans for a project in Atlanta.
Some 174 million square feet of office space — double San Francisco’s entire inventory — is available for sublease across the US, according to real estate brokerage firm Savills. That’s almost twice what was available pre-pandemic, Savills said. Companies looking to sublease space are still on the hook for rent for the entirety of the lease. But the retrenchment shows how the tech downturn, which contributed to the collapse of Silicon Valley Bank and turmoil in financial markets, is spilling into the broader economy. San Francisco, Seattle and New York are bearing the brunt of the pullback. While New York can count on office demand from financial services and legal firms, tech-centric San Francisco has no such cushion. Seattle business groups, meanwhile, are calling for a tax holiday to keep tenants downtown.
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