Silicon Valley tech giant Meta has officially offloaded another chunk of its vast real estate portfolio.
The Facebook parent company completed a sublease deal with pharmaceutical company CymaBay Therapeutics for its building at 7601 Dumbarton Circle in Fremont, California, according to information filed with the Securities and Exchange Commission.
CymaBay plans to use the 52,416-square-foot property, located a short drive away from electric car maker Tesla's manufacturing plant, for its new corporate headquarters. The sublease agreement took effect earlier this month and includes a 13-month abatement period as well as a tenant improvement allowance of up to $786,240. The arrangement is set to expire at the end of March 2032 to coincide with Meta's original terms.
A spokesperson for the social media platform confirmed the deal to CoStar News but did not provide additional details.
The agreement is the latest in the Menlo Park, California-based company's widespread effort to dump office space around the world to curb costs and adjust to slowing revenue growth. 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.
Looking for Takers
Meta is hardly alone in shedding space. Many Silicon Valley tech giants over the past year or so have been cutting back on their property holdings by shutting office locations, subleasing out unwanted space, terminating prelease agreements and walking away from future investments. Those decisions have loaded up the Bay Area's real estate market with available space.
For Meta, the downsizing reversed a years-long stretch of blockbuster leases and high-profile expansions. Within the past year, Meta has been trying to shed millions of square feet of office space it no longer uses, needs or wants to pay for. The company estimated it would take a roughly $2 billion hit before the end of 2023 related to consolidating its offices and exiting space.
As it pares back space, it also has scaled back its future hiring estimates, suggesting the real estate decisions could be set for a while.
While much of Meta's offloaded space is still weighing down markets such as San Francisco and New York, there have been a handful of recent deals to ease the blow.
Walmart.com last month agreed to take over the entire four-building Moffett Green campus in Sunnyvale, California, that Meta had listed for sublease. In October, the social media giant finalized a deal with travel tech company Navan for roughly 36,000 square feet in the downtown San Francisco tower at 181 Fremont. Meta listed for sublease all 431,879 square feet it occupied in the high rise earlier this year.
Nationally, record amounts of sublease availabilities have provided expansion-minded companies with an often cheaper alternative to leasing directly from landlords. More than 209 million square feet of office space is sitting on the sublease market, down slightly from its mid-2023 peak of 215 million square feet, according to CoStar data. While real estate stakeholders might cheer the decline, that figure is still double the amount of sublease availability reported prior to the pandemic.