Facebook Parent Meta, Amazon Pull Back on NYC Office Expansions
Tech giants Meta Platforms Inc. and Amazon.com Inc. are cutting back on planned office expansions in New York.
(Bloomberg) -- Tech giants Meta Platforms Inc. and Amazon.com Inc. are cutting back on planned office expansions in New York.
Facebook's parent company Meta has decided against taking an additional 300,000 square feet (27,870 square meters) of space at 770 Broadway, a building near Astor Place where it's already located, according to people familiar with the matter. The company is also pausing plans to further build out its new offices in Hudson Yards as it evaluates what to do with the space, said the people, who asked not to be named discussing private information.
Nearby, Amazon has also cut back on the amount of space it had intended to lease from JPMorgan Chase & Co. at Hudson Yards, reducing the square footage it aims to take over, according to a person familiar with the matter. No deal has been signed yet.
Meta spokesperson Jamila Reeves said the company remains firmly committed to New York and is looking forward to opening the Farley Building near Pennsylvania Station in the coming months.
“There are often a number of reasons why we wouldn't proceed with a particular deal, including office utilization,” Reeves said in an emailed statement. “The past few years have brought new possibilities around the ways we connect and work. We are working to ensure we're making focused, balanced investments to support our most strategic long-term priorities.”
Spokespeople for Amazon and JPMorgan declined to comment. Office Shifts Many tech companies have been moving toward more flexible, remote-working options since the start of the pandemic. At the same time, broad stock market declines and increasing concerns about the potential for the US economy to head into a recession have prompted some companies to slow hiring. Meta has announced plans to slow or pause hiring for some mid- to senior-level positions.
While both Meta and Amazon are still building out giant offices in Manhattan, the two companies' more-cautious approach is a potential harbinger for future challenges across the city's office market as businesses seek to cut costs and re-evaluate real estate strategies. New York still faces a glut of office supply, with more than 18% of space available despite a slight leasing rebound earlier this year, according to second-quarter data from Savills Research.
Meta is still committed to large leases the company signed in recent years at both Hudson Yards and the redeveloped Farley Building. Even while most of its employees worked from home, the firm continued to build out its new offices and seek extra space in anticipation of even more growth.
Meanwhile, Amazon also leased space in Hudson Yards in 2019 and shelled out more than $1 billion in 2020 to purchase the Lord & Taylor building in midtown Manhattan for new offices.
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