As commercial and residential vacancy rates continue to reach all-time highs in San Francisco, many big tech buildings have been left abandoned.
One of the largest offices there comes from Google, which owns a whopping 1.4-million-square-foot building that has remained on the market for sublease.
Other big tech companies, like Meta and Roku, have also put up space for sale.
Back in March, Intel even listed its 505,000-square-foot office.
“As a hybrid-first company, we are continuing to assess and optimize our space utilization to create more vibrant workspaces for our employees when they are on-site, while also achieving cost reductions,” Addy Burr, with Intel Corporation Communication, previously told The Post in a statement.
But no one is rushing to buy.
“Big companies are dumping space on the market with almost no takers,” Craig Petersen from Kidder Mathews told the Real Deal. “We are seeing more activity in the small office markets.”
Big tech companies are attempting to sell their buildings to no avail. Getty ImagesAdditionally, in a recent second-quarter report by Savills, Silicon Valley’s office availability saw an acute increase due to considerable givebacks by large tech companies.
“With the entire technology sector in a correction, office availability in Silicon Valley is at an all-time high and is expected to increase even further as return to office rates have lagged the rest of the country despite high-profile corporate announcements,” the report says.
Since last quarter, leasing activity has remained significantly low — down 35%. And since last year, leasing activity has gone down even more — by 52%.
What seems to be puzzling prospective tenants are the prices, which remain the same.
Meta has also put a considerable amount of office space up for sale. AP“Usually, when availability and vacancy levels go up, rents go down,” Michael Soto, head of office research at Savills, said. “But rents have been very sticky as many landlords have offered high concessions in order to keep their face rents high. In addition, there are a lot of office landlords out there who simply cannot drop their rents because of debt covenants with their lenders.”
Meanwhile, companies are not only attempting to get rid of space, but they have also halted major construction projects that would have reshaped Silicon Valley.
Google, for example, has stopped its Downtown West project in San Jose. The development would have included 4,000 homes, 7.3 million square feet of offices — and 500,000 square feet of shops, restaurants and a community center. There would have also been an additional 15 acres of parks.
Google’s decision to stop the development hindered on the lag to return to the office following the COVID-19 pandemic.
“All new development was put on hold when the pandemic arrived and they are not starting up due to extremely high office vacancy, not just Google’s project,” Petersen added. “It would be crazy to start a project with the high office vacancy.”






