Google's days of significantly downsizing its global real estate footprint are far from over with the company's latest plans to shut down its office campus in one Seattle neighborhood and consolidate its operations at another.
The Alphabet subsidiary confirmed a decision to shift the bulk of its Seattle workforce to its campus in South Lake Union, a move that will ultimately result in the closure of its four-building footprint on the other side of Lake Union in the city's Fremont area. While a timeline for the consolidation hasn't yet been disclosed, the exit will eventually mean cutting roughly 295,000 square feet from the Silicon Valley tech giant's shrinking office portfolio.
“We remain committed to our long-term presence in Seattle,” Google spokesperson Ryan Lamont said in an emailed statement, adding that the Mountain View-based company is “focused on investing in real estate efficiently to meet the current and future needs of our hybrid workforce.”
Google currently mandates its workers to commute to an office at least three days per week, but it is facing pressure to ramp up those in-person requirements.
Over the past two decades, Google has been one of the most powerful forces for Seattle's fast-growing tech industry, helping to set the stage for other tech companies such as Apple and Meta to follow suit by expanding their own real estate portfolios in the region. Google made its move to the Fremont area in 2006, eventually expanding to a footprint that now includes the buildings at 501, 551, 601 and 651 N. 34th St., according to CoStar data.
The company in 2019 expanded to South Lake Union, a neighborhood just north of downtown Seattle that over the past decade has evolved into one of the most densely tech-populated hubs in the country with companies such as Amazon — which is headquartered in the neighborhood — fueling employment and office growth.
Google's South Lake Union campus, which made its debut months before the pandemic's 2020 outbreak, encompasses roughly 1 million square feet. The company also has a significant presence in Kirkland, Washington, a Seattle suburb where last fall the company restarted plans to expand its regional campus after putting construction on ice in early 2024.
All told — and before any cuts to its Fremont presence — the tech company occupies nearly 1.8 million square feet across greater Seattle, according to CoStar data, a footprint that makes it one of the largest office occupants in the region.
Aiming for stability
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 Google and other major tenants' continued readjusting of their real estate footprint underscore the challenges baked into any hope of a post-pandemic rebound.
Similar to other tech giants around the world, Google 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 expansion that was fueled by soaring demand for its products and services, leading the company to lease, develop or acquire large swaths of space to accommodate its record headcount growth. Those cost-cutting efforts also coincide with plans to redirect the saved expenses from trimming previously vast real estate portfolios toward high-priority initiatives such as artificial intelligence.
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 Silicon Valley and Seattle.
Even with those cuts, reemerging demand among tech companies for space in the Pacific Northwest meant Seattle marked its best annual performance last year since 2021, according to CoStar analysis. The region landed several blockbuster deals among tech companies that committed to more than 100,000 square feet, and the Seattle market's vacancy rate is expected to peak at about 17% before rising demand and a lack of new construction collide to help bring it back down.
"What’s creating demand is a variety of factors like return to office, and you’ve got that going on in large scale across the West Coast now, and that’s having an impact," said Rob Paratte, Kilroy Realty's executive vice president and chief leasing officer. "Downtown Seattle’s had a 23% increase in traffic in the last 90 days or so, so rush hour is back, but that demand is also a function of business needs and business confidence. There's a sentiment we're hearing that things are just more stable now."