Despite the yo-yo of uncertainty that each new COVID-19 variant presented, office leasing activity is bouncing back. Places like Chicago and Atlanta are seeing record amounts of office lease deals since the pandemic began, while San Francisco and Manhattan have surpassed pre-pandemic lease levels.
Though companies like Uber are downsizing their offices thanks to the rise in remote work, other companies are taking advantage of emptied spaces and employing a different strategy- expanding their office real estate footprint as much as possible in order to have more flexibility for the future.
The social media platform’s office real estate expansion might come as a surprise since Twitter announced that employees could work from home indefinitely. Just before COVID crept into the U.S., then-CEO Jack Dorsey told Business Insider that Twitter’s concentration in San Francisco “is not serving us any longer.” The social media platform would brace for a more remote workforce (perfect timing on that front), and seek to expand into the Bay Area. Last September, Twitter signed a lease for its first office in Oakland, California. The 66,000 square foot, 18-story building is being designed for a hybrid work model and is set to open late this year.
However, it wasn’t the end of expansion for Twitter’s offices in San Francisco. Twitter is moving its headquarters to 1355 Market Street, a building which had been previously owned by Thumbtack, a home services website based in the U.S. The move will increase Twitter’s office real estate by 80,000 feet.
Sephora
Speaking of San Francisco, Sephora signed its largest office lease of the pandemic in the golden city. The beauty retailer is subleasing its new space from Salesforce, one of the many companies that scaled down their office space thanks to the rise in remote work. Salesforce previously occupied all 30 floors at 350 Mission Street, 16 of which are now signed over to Sephora.
Even though Sephora will be consolidating its existing offices in 425 and 525 Market Street into the 286,000 square foot space, there’s “ample” space leftover in its new building to accommodate for flexible space and future growth. Sephora is expected to be settled in by 2023.
Meta
The “Silicon Hills” tech wave is showing no signs of letting up. Meta, the company formerly known as “Facebook,” just leased 33 floors from what will be Austin’s largest skyscraper. Construction of the 66-story high-rise building is expected to be finished by 2023. According to the Austin Business Journal, Meta leased a whopping 33 floors of the skyscraper, which will span 589,000 square feet.
One could argue that leasing space in an 840 foot-tall building is embracing the adage that everything is bigger in Texas. Meta seemed to be taken with the building’s largesse, it leased all of the commercial space in the city within the building.
Though Google is usually the first company to delay its office reopenings because a new variant emerges, it is committing to a future where people show up to work, at least part-time.
Google is opting to buy the offices it’s already leasing. As of now, Google is planning to fork over $1 billion for its Central St. Giles office in London. That’s a discount compared to the $2.1 billion it intends to pay for its New York headquarters at 550 Washington Street, marking the largest office transaction in the United States since the pandemic began.
Chewy
In a move that showcased the stark growth of the e-commerce industry, Chewy, an online retailer for pet food and other pet-related products, signed a massive 8-year lease for two buildings in Plantation Pointe in South Florida. The total square footage spans to 221,597.
Like a lot of companies in e-commerce, Chewy’s sales shot up during the pandemic to a staggering degree thanks to a perfect storm of circumstances. Not only did the lockdowns create a necessity for online retail, pet adoptions rose significantly as more people began working from home. Chewy’s revenue increased by a whopping 45 percent in the early months of the pandemic, though the growth has been able to keep pace with those figures since then. Though there’s speculation that the growth was solely driven by the pandemic, Plantation City Council didn’t see it that way. South Florida’s office market started leveling off around 2018, prior to the pandemic’s onset, and the council saw Chewy’s potential to re-energize the area. To entice the e-commerce company away from its existing location at the Design Center of the Americas mixed-use project in Dania Beach, Plantation City Council authorized a hefty tax-refund incentive package.
