One of Silicon Valley’s biggest names is looking to offload office space. Big Tech firm Google is putting a large chunk of space in Palo Alto, California, up for sublease. The company listed more than 182,500 square feet of space across four buildings at the Foothill Research Center on the sublease market. Google has leased several buildings at the campus for nearly 10 years. In that time, the company has expanded its footprint, most recently adding more than 56,000 square feet in 2020. But like a lot of other tech companies, Google has been shrinking its office footprint since the early months of this year after it announced plans to lay off 12,000 of its employees. Those tech companies include Meta, the parent company of Facebook, which is looking to offload a large portion of the more than 2.2. million square feet of office space it leased in Manhattan, opting out of renewing leases in Hudson Yards and Park Avenue South.
Vacancy rates in Silicon Valley’s office market hit a historic high last month, reaching 21.6 percent in the second quarter, according to Cushman & Wakefield. The previous high was in the first quarter of 2010, just after the Great Recession when office vacancy in the region hit 19.1 percent. Despite the record high vacancy and overall pessimism about the office market on a national scale, some companies are doubling down on the office and opening new spaces that they believe will better meet workers’ needs in the hybrid era. Software company Adobe, which has long had its headquarters in Downtown San Jose, is a good example. They recently opened a new tower for 3,000 employees in its HQ campus and promised no more layoffs in 2023. Tech might be faltering right now but they will likely continue to be the biggest driver of office leases in the near future.