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The office real estate picture in Austin, TX is continually altering however one firm’s loss could also be one other firm’s acquire. Meta (NASDAQ:META) is forsaking its lease in The Area, a mixed-use neighborhood that features a number of workplace towers.
Meta leased Area 12, a 15-story glass tower, however as of Jan. 1, 2026, IBM shall be taking on 320,000 sq. toes of workplace house. The property features a cafe, out of doors terraces, a health middle and bike storage. The brand new lease will prolong the lease maturity from 2031 to 2040.
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IBM has a protracted historical past with the realm now referred to as the Area. The unique 235-acre IBM analysis campus was offered in 1999 for $60 million and IBM leased again a part of the property. IBM introduced that it could be relocating to a brand new campus by 2027. The corporate was planning to lease house in OneTerra, a 507,200-square-foot workplace mission being developed by Hines Actual Property. In an announcement, IBM mentioned, “IBM stays dedicated to investing in new experiences for our purchasers and staff on this market.”
The transfer is a win for Cousins Properties (NYSE:CUZ), an workplace REIT that owns the constructing. Cousins’ Area portfolio includes 2.5 million sq. toes and is presently over 99% leased. “The Area gives a extremely amenitized expertise that main corporations acknowledge as a essential instrument to drive worker recruitment, retention and tradition. We’re thrilled to see rising buyer demand for way of life workplace properties in Austin,” mentioned Colin Connolly, President and Chief Govt Officer of Cousins Properties.
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Meta has been altering its relationship with workplace properties in Austin and elsewhere. Over the previous a number of years, it has tried to go away round a million sq. toes of workplace house in Austin. In 2022, it introduced it could not be transferring into the 586,000-square-foot house it leased on the not too long ago accomplished Sixth & Guadalupe Tower, presently the tallest in Austin at 865 toes. Final yr, the corporate additionally put 120,000 sq. toes at 300 West Sixth Road into the sublease pool. It nonetheless has 320,000 sq. toes of house on the Third + Shoal constructing.
Meta’s workplace footprint can be shrinking in Bellevue, WA, the place it has leased a number of properties, a few of which are actually up for sublease. Final yr, it subleased its house in Fremont, CA, to a pharmaceutical firm. It listed its 435,000-square-foot house at 181 Fremont in San Francisco for sublease in 2023 and potential tenants have included TikTok and Zendesk.
The Austin workplace market has been experiencing loads of provide coming on-line on the identical time that many corporations are reconsidering their relationship with workplace house. Many tech corporations have no less than some footprint within the booming state capital however some have been lowering or scaling again their efforts. In current months, as a lot as 20% of Austin’s workplace house has been vacant. Offers are nonetheless getting accomplished however are sometimes smaller leases below 100,000 sq. toes as corporations rethink their relationship with massive headquarters.
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This text Meta Is Leaving Its Austin Office, Guess What Big Tech Company Is Moving In initially appeared on Benzinga.com
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