Months after dumping more than a million square feet of space on the sublease market, one of Silicon Valley's largest office tenants is at it again with an attempt to offload another high-profile campus as it slashes its significant footprint in the region.
Alphabet Inc.'s Google listed for sublease more than 182,500 square feet across four buildings at the Foothill Research Center in Palo Alto, California, according to listings posted by brokerage Newmark and viewed by CoStar News. The move is the latest by a Silicon Valley tech powerhouse to slash its expansive real estate portfolio in an effort to rein in expenses.
The sublease listings include the buildings at 4001, 4005, 4009 and 4015 Miranda Ave. Google initially moved into the office park nearly a decade ago, according to CoStar data, where it has gradually expanded its presence. It added more than 56,000 square feet through a lease it signed with landlord Hudson Pacific Properties as recently as 2020, one of many buildings it added to its real estate portfolio in the years leading up to, and in the early stages of, the pandemic.
Neither Google nor Newmark responded to CoStar News' requests to comment.
Like other tech giants, Google has been on an aggressive cutting spree since the beginning of the year, reversing a decade-long expansion as demand for its products and services soared and the company had to lease, develop or acquire large swaths of space to accommodate its record headcount growth.
The tables have quickly turned, however, and Google parent Alphabet has responded to slowing revenue growth and mounting economic uncertainty by shifting priorities to profitability over expansion.
The company released plans earlier this year to lay off 12,000 employees — the largest round of job cuts in its history.
Google is also said to have paused progress on plans for its $1 billion Downtown West development, an 80-acre mixed-use campus representing Google's largest real estate investment.
Dialing Back Growth
Alphabet and other tech companies such as Meta, Salesforce and Amazon posted surging revenue, users and advertising early in the pandemic but are now contending with a slowing economy and fears of a recession.
Many Silicon Valley tech giants have responded by making deep cuts to their property holdings by shutting office locations, subleasing unwanted space, terminating prelease agreements, and walking away from future investments. Those decisions have loaded up the Bay Area's real estate market with millions of square feet of sublease space or have downsized offices as leases come due.
Google's latest sublease listing would add to the roughly 1.4 million square feet it dumped in late May across several offices near its headquarters in Mountain View, California.
"As we work to ensure that our real estate investments match the needs of our hybrid workforce, we're ending leases for a number of unoccupied spaces," a Google spokesperson recently told CoStar News. "We remain committed to our long-standing presence in the Bay Area and investing in the local community."
While Silicon Valley's office market has fared better than its counterpart in San Francisco, sublease space in the region is climbing past record highs. About 7.5 million square feet of sublet office space is up for grabs, according to CoStar data, a record-high figure that has pushed total availability past 19%.
Even with the listings, Google remains one of the largest commercial tenants in the San Francisco Bay Area. Its total footprint spans upward of 31 million square feet of office and flex space across the region, according to CoStar data.