Attendance at downtown Seattle office buildings this November increased from 15-20% to 35-60% year-over-year as more companies establish in-office mandates, according to a new CBRE report. Did.
But as leasing activity shifts to professional services, legal, and financial firms, only “a handful” of technology tenants signed new leases downtown in the fourth quarter of last year, the report said.
The adoption of hybrid work policies by tech companies is having a major impact on the commercial real estate market. A new report from JLL shows that total vacancy in the Seattle area hit 16.7% in the fourth quarter of last year.
And now, with layoffs rampant across the tech sector, the need for physical offices may be even less.
Several tech giants have decided to forgo office space. Meta said earlier this month that it would sublease his six-story building near downtown Seattle and 325,000 square feet of space in nearby Bellevue, while Microsoft renewed the lease on the 561,494 square feet of space in downtown Bellevue. We do not plan to.
Amazon has laid off at least 2,300 jobs in the Seattle area, and The Seattle Times reported this month that the company is poaching about 2,000 employees from its downtown office buildings.
As part of a restructuring plan announced on January 4th, Salesforce said it would cut 10% of its workforce and reduce its real estate footprint.
“Businesses continue to reassess their need for space and the economic outlook remains uncertain. [Seattle-area] The office market will continue to be tenant-friendly and vacancy rates will continue to rise,” notes the JLL report.
Real estate industry leaders say it’s too early to tell whether tech layoffs will cause a further setback in rental activity.
Even with recent job cuts, many companies are maintaining a much larger employee base compared to pre-pandemic levels.
“Theoretically, the square footage per employee remains the lowest ever,” Tim Harrison, JLL’s Pacific Northwest research director, said in an email.
Harrison hinted that layoffs could actually be a mandatory feature to get employees back in the office.
“I think the next six months will be very important how stringent the return-to-office policy is and how many employees start returning to the office for fear of potential layoffs,” he said. “That obviously has a direct impact on how much space these companies lease/build is actually used.”
Companies are still opening new offices. Meta recently expanded in Bellevue’s Spring District and plans to open a new building called Building X in Redmond, Washington this summer.
Microsoft is in the midst of a major redevelopment of its original Redmond headquarters, but the company recently confirmed to GeekWire that it is pushing back time slots for some of the buildings, noting that the interior space will meet employee needs. You say you want to make sure it reflects your requirements. In the office space of the new era of hybrid work.
Amazon, likewise, paused work on several new office towers in downtown Bellevue last summer, asking how office floor plans should be adjusted to reflect the new needs of its employees. He said that he was deciding whether