Big Tech’s pullback from office leasing is well documented, but the amount Mark Zuckerberg is coughing up to ditch a lease in London shows just how far these companies are willing to go to wash their hands of unnecessary space.
Meta, Facebook’s parent company, is spending $181 million to break its office lease at British Land’s 1 Triton Square in the United Kingdom city, the Financial Times reported. The tech company had 18 years remaining on its lease and never moved into the eight-story building.
Most office tenants bailing on space can cite how the pandemic changed the need for existing offices. That excuse doesn’t work for Meta, which agreed to lease the 310,000-square-foot space in 2021, a year into the pandemic. By the end of last year, however, the company said it would not occupy the space and instead try to sublet it, according to Bisnow.
Meta still holds a lease at another British Land property, 10 Brock Street, taking all 10 floors of the significantly smaller property. In the last eight months, British Land leased 262,000 square feet across its London office portfolio. The firm stands to benefit from the cash infusion that will come from Meta’s lease break.
Colm Lauder, real estate analyst at Goodbody, estimates Meta is looking to sublease or give up nearly 1 million square feet in Europe, particularly in London or Dublin.
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The tech giant kicked off a dramatic restructuring of costs related to facility consolidation last year, recording more than $3.3 billion in expenses so far. Meta spent more than $1 billion reducing its real estate footprint in the first half of the year.
In June, Meta moved to sublease more than 100,000 square feet at a property in Austin, Texas, on top of 589,000 square feet it was already subleasing elsewhere in the Texas capital. The same month, it put up a 122,000-square-foot space for sublease in Washington, D.C.
Last year, Meta decided to return two spaces combining for 250,000 square feet at Hudson Yards in Manhattan, which will be surrendered after the respective leases expire at the end of next year.
— Holden Walter-Warner