The once reliable technology industry is now causing office landlords to wring their hands in anxiety.
Recently, both Meta and Twitter slashed 13% and 50% of their workforce, respectively, putting into question the need for massive office space and campuses.
The layoffs indicate a desperate need to cut down on expenses. While research previously indicated that firings would be a last resort option for these corporations, reality tells a different story.
At the end of 2021, Meta “owned and leased” around 10 million square feet of office space and had around 69 acres of land in the pipelines for future development.
Now, the Wall Street Journal is reporting that Meta will cut back on their office footprint, adopt desk-sharing and continue to freeze its hiring efforts into 2023.
Meta is not unique in its moves, with other major companies like Lyft and Salesforce turning to job cuts. For landlords who have scrambled to return to pre-pandemic levels, this is bad news.
Their most reliable tenants are getting out of dodge, so what could be the future for these building owners?
One likely scenario is turning to coworking operators, who can take up space within a building and allow landlords to welcome new tenants without long-term commitments.
By teaming up with coworking firms, landlords have the ability to reduce their exposure to economic uncertainty, global events and establish connections with new companies from a variety of industries.
