Social media platform Meta, after years of gobbling up space, is now dismantling large chunks of its real estate portfolio as part of efforts to redirect capital to higher-priority investments.
The Silicon Valley tech giant is extending its aggressive consolidation plans with its latest decision to close several underused offices across its campus in Fremont, California, a spokesperson confirmed to CoStar News. The move will effectively dump about 180,000 square feet from Meta's regional portfolio, backpedaling on years of pre-pandemic expansions the company is now quickly looking to dismantle.
The Menlo Park-based company earlier this month told employees working out of the offices at 6591 Dumbarton Circle, 6504 Kaiser Drive and 6520 Kaiser Drive that they would be relocated either to Meta's corporate headquarters across the bay or elsewhere throughout the roughly 1 million-square-foot Fremont campus.
The decision, earlier reported by the San Francisco Standard, will be “an opportunity to optimize our space usage,” the Meta facilities team wrote in a memo to affected employees. The timeline for the office closures was not immediately made clear but will ultimately include shutting down several popular worker amenities such as cafes and the on-campus music room.
Landlords across the country have pointed to accelerated leasing volumes and longer deal terms as a sign of the office market's long-awaited recovery. Yet ongoing real estate cuts by Meta, formerly known as Facebook, and other tenants underscore the challenges baked into a post-pandemic rebound.
Similar to other tech giants around the world, Meta has been on an aggressive cutting spree since the beginning of 2023. Many Silicon Valley companies over the past several years have been reducing their property holdings by shutting office locations, subleasing out unwanted space, terminating prelease agreements and walking away from future investments.
The cuts have reversed a decade of real estate expansion that was fueled by soaring demand for its products and services.
The shift toward a more prudent approach to real estate growth has loaded up the national real estate market with millions of square feet of available office space, especially in tech-concentrated hubs such as the San Francisco Bay Area.
The Fremont closures are the latest in Meta's widespread effort to dump office space around the world to curb costs and allocate the savings toward growth in artificial intelligence and other priority investments. Meta had been adding to its corporate presence in the Fremont area until as recently as 2021, intending to create a sprawling hub in San Francisco's East Bay area. It began to reverse course in December 2022 when it put space in the area up for sublease.
Within the past several years, Meta has been trying to shed millions of square feet of office space it no longer uses, needs or wants to pay for. As a result, the company has paid billions of dollars in impairment charges related to efforts to consolidate its offices and exiting corporate hubs.
As it pares back space, the social media company also has scaled back its future hiring estimates, suggesting the real estate decisions could be set for a while.
Along with the Fremont closures, the company recently listed for sublease more than half a million square feet of office space in a trio of newly redeveloped buildings north of its Silicon Valley headquarters in Burlingame. The listing spans several properties, some that Meta never formally occupied, that are operating on lease terms not set to expire until 2039.