WeWork’s 457K sf Mountain View office on market for lease

WeWork is marketing its two-building office complex in Mountain View for rent after previous occupant Meta opted out of its lease on the entire property, The Real Deal has learned.

The vacancy, spanning a pair of adjacent six-story offices at 391 and 401 San Antonio Road, hit the market last quarter, according to Colliers’ latest Silicon Valley market report. While Colliers and fellow commercial brokerage JLL reported that the block of space totals 440,000 square feet, it’s actually about 457,000 square feet, according to a March 2021 report by credit rating agency DBRS Morningstar.

LinkedIn originally leased both buildings from developer Merlone Geier Partners, but after Microsoft acquired the professional networking service in 2016, its new owner assigned the lease to flex space provider WeWork and provided a guarantee on it through July 2029, according to DBRS’ analysis. WeWork then leased the entire complex to Meta, formerly known as Facebook, through July 2034, the report said.

A Meta spokesperson confirmed that the company has terminated its lease on the property before declining further comment. WeWork declined a request for comment, while Brookfield Properties, whose parent company owns the San Antonio Road complex, didn’t respond. A JLL representative indicated that WeWork has selected it to market the complex before declining further comment.

WeWork structured its lease with Meta as a service agreement that included an opt-out clause the latter ended up exercising, according to brokers familiar with the matter. Meta vacated the 218,000-square-foot building at 401 San Antonio Road in the second quarter and the adjacent, slightly larger office at 391 San Antonio Road during the past three months, the brokers said. The latter structure is furnished while the other isn’t, they added.

Brookfield acquired the office buildings, an adjacent movie theater and a standalone parking garage from Merlone Geier in March 2021 for $630 million. The properties are part of the Village at San Antonio Center, whose mix of uses includes an apartment complex, a Safeway supermarket, a hotel, shops and restaurants.

WeWork’s Mountain View vacancy is the single largest one to hit Silicon Valley’s office market so far this year, according to Colliers’ report. It contributed to the region’s office vacancy rate increasing to 10.5 percent from 10.1 percent quarter-over-quarter, Colliers’ data show. Neither Colliers nor JLL mentioned Menlo Park-based Meta’s name in connection with the space in their market reports. WeWork’s website lists the building at 401 San Antonio Road as available and says “pre-opening” rates are now obtainable for the office at 391 San Antonio Road.

It’s unclear whether Meta’s exit from the Village at San Antonio is tied to the company’s larger plan to shrink its office footprint as it adapts to hybrid work. While Meta is still opening new workplaces, it may let some existing office leases expire or could consolidate space across multiple buildings into one, John Tenanes, the company’s vice president of real estate, told the Wall Street Journal last week.

Meta reportedly used the Mountain View space for contract workers whom the company intentionally kept separate from its main campus, according to the DBRS report. The company had previously described the space, which it occupied in phases from 2018-2019, as temporary and intended to support part of its growing workforce.

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