Meta’s expensive plan to shed office space includes declining lease renewals at two Hudson Yards properties.
The parent company of Facebook plans to return space at 30 and 55 Hudson Yards to Related Companies, Bloomberg reported. The two spaces span roughly 250,000 square feet and the leases run through 2024.
Meta isn’t distancing itself from its third Hudson Yards office yet. Most of the company’s space in the district is at 50 Hudson Yards. While the company is subleasing some of its space at the tower, it also backed off plans to expand its presence at the building earlier this year.
Executives at the company last month disclosed a series of cost-cutting measures amounting to more than $3 billion to consolidate office space. The move came after Meta’s revenue declined in the third quarter. During that quarter, Meta spent $413 million to terminate office leases, including at 225 Park Avenue South; it expected to spend $900 million on office realignment in the fourth quarter.
Read more
Development
New York
Related lands $349M for 50 Hudson Yards
Commercial
Austin
Meta backs out of plan to occupy 589K sf in Austin
Meta also recently backed out of a number of other office moves. In addition to hitting pause on the 50 Hudson Yards buildout, the company recently backed out of a 300,000-square-foot expansion at Vornado Realty Trust’s 770 Broadway. Outside of New York, Meta also backed out of a plan to fill a new building in downtown Austin, Texas, instead planning to sublease the 589,000 square feet it leased.
Meta is one of many big tech companies to downsize, impacting the office sector throughout the country’s major markets.
Big tech firms were trying to sublease a combined 30 million square feet of office space across the country as of earlier this month, according to recent data from CBRE. That’s up from 9.5 million square feet in 2019’s fourth quarter and represents 14 percent of the sublease space available on the market, which CoStar recently pegged at a record 212 million square feet.
— Holden Walter-Warner