The bright lights of Times Square are proving to be too much for Microsoft, which aims to get rid of nearly a quarter of its space at an SJP Properties tower.
The tech giant is seeking to sublease office space at 11 Times Square, joining a growing trend of major technology companies scaling back their real estate footprints, Bloomberg reported. Microsoft is marketing more than 42,000 square feet, according to real estate data firm CoStar.
Microsoft leased over 200,000 square feet at the 40-story, 1.1 million-square-foot property in 2013.
When approached for comment, a spokesperson for Microsoft declined to provide details to Bloomberg. SJP did not immediately respond to a request for comment from The Real Deal.
This move comes as Microsoft has been implementing job cuts and making reductions in its real estate portfolio. The company recently scrapped plans for an office complex in London.
Microsoft agreed in 2021 to lease 150,000 square feet at Bromley Companies’ 122 Fifth Avenue, half of the total at the Flatiron District building. There’s been no indication the tech company plans to abandon that lease.
The decision to downsize comes as office landlords grapple with historically high vacancy rates and decreased demand.
Where big tech was once a major driver of office leasing, rollbacks have become ubiquitous. Several other tech firms, including Alphabet, Meta and Amazon, have also announced plans to reduce real estate footprints.
In Manhattan, Twitter and Spotify are among the companies that have sought to sublease their office spaces this year. Spotify in March started marketing 86,000 square feet across five floors at Silverstein Properties’ 4 World Trade Center.
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The ongoing trend of tech companies subleasing their offices highlights the changing dynamics in the commercial real estate market, as remote work and flexible work arrangements become more prevalent.
— Holden Walter-Warner