Facebook’s parent company has withdrawn plans to fill a new building in downtown Austin as Meta makes moves to shrink its office footprint.
The tech giant plans to sublease rather than occupy the 589,000 square feet it leased in Lincoln Property Company’s Six and Guadalupe. genuine article I learned.
large leases, announced in Januarycovers all office space in the 66-story tower under construction and is one of the largest office leases in the city’s history.
Lincoln Property Company declined to comment, but Meta spokesperson Andrea Beasley confirmed the decision.
“We are currently evaluating our real estate portfolio globally, making focused and balanced investments to support our most strategic long-term priorities,” Beasley said. .
It’s not just Austin: Last week, Meta executives said in an earnings call that they expected the company to spend more $3 billion to shrink office footprintThe company already spent $413 million on office leases last quarter and plans to spend another $900 million this quarter.
Dave Wehner, the company’s chief financial officer, said:
By subleasing the Austin building deal instead of canceling it, Meta can avoid the standard surrender charges in most lease agreements. However, subleasing rent is usually much lower than what the original tenant pays.
Austin is experiencing one of the strongest return-to-office trends in the country, and Sixth and Guadalupe is one of several Class A spaces under construction in the city. good developer I am drawn not only to the Central Business District, but also to districts such as The Domain and South Congress.
But Meta’s exit comes amid signs that not everything is booming in the Austin office market. Last week, developer Kilroy canceled plans to build his 493,000-square-foot site. stadium towercites economic uncertainty.
Six and Guadalupe plans to obtain its office and retail occupancy certificates in the spring.