Big Tech holds firm bet on the future of offices

Industry leasing rose 76% YOY in last three quarters of 2021

National /
Feb.February 23, 2022 10:30 AM

From left: Sundar Pichai, chief executive officer, Alphabet; Mark Zuckerberg, founder, Meta; 550 Washington Street (Getty Images, LoopNet)

Amid an uncertain future for offices, one industry has ramped up its bets that joint working spaces are here to stay: Big Tech.

Tech companies picked up a growing share of spaces across the country amid unclear return-to-office plans, the New York Times reported. CBRE data show tech companies leased 76 percent more space year-over-year in the last three quarters of 2021.

Anne Helen Petersen, journalist and author of a book on remote working, told the Times the biggest companies are “hedging their bets” about the future of offices, backed by big coffers.

“If the future’s going to be fully distributed, ‘we’ll be setting up an apparatus for that,’” Petersen said. “If the future’s going to rubber-band back to everyone back to the office, the way it was in 2020, ‘we’ll go back to that.’”

While the pandemic hasn’t scared tech companies away from offices, it has spread them outside of major hubs like New York City and the Silicon Valley.

In Phoenix, tech leasing grew more than 300 percent from mid-2020 to mid-2021, according to CBRE data. Meanwhile, tech leasing growth doubled in both Vancouver and Charlotte in mid-2021, according to the Times.

Tech giants continue to bet on big cities as well, as evidenced by some of the biggest office deals in recent months.

In September, Google shattered the pandemic-era record after agreeing to purchase 550 Washington Street in New York City for $2.1 billion. The tech giant had already leased St. John’s Terminal from Oxford Properties.

Weeks later, Microsoft signed up to lease half of Bromley Companies’ 122 Fifth Avenue, snagging 150,000 square feet at the Flatiron building. It’s not clear when the company will move into the space, which is under renovation.

Facebook, a subsidiary of Meta, was reported to be hunting for more space in New York City in the fall, despite already having a handful of offices in the city. One consideration was adding 300,000 square feet at the company’s Broadway and Astor Place location.

[NYT] — Holden Walter-Warner





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