The parent company of the world’s largest and most popular social media network said on Thursday that it won’t go forward with taking up residency in Austin’s newest skyscraper that’s currently under construction, Austin-based media outlets reported.
Instead, Austin NBC affiliate KXAN reported Meta Platforms, Inc. will sublease the property that’s going up at 400 W. Sixth St.
The station reported that Meta, which oversees Facebook, previously leased all of the skyscraper’s office space on Dec. 31, 2021, with Thursday’s announcement signaling another setback for the state capital’s commercial real estate scene.
Citing The Real Deal website, Austin ABC affiliate KVUE reported that unfavorable revenue figures and economic instability prompted Facebook to scale down its office footprint through the upcoming calendar year.
Subleasing the 66-story office building would keep Meta from being hit with termination fees, the report said.
According to KVUE, Facebook Chief Financial Officer (CFO) Dave Wehner said that all areas of the company’s operating expenses have been increasingly and heavily scrutinized.
“However, these moves follow a substantial investment cycle so they will take time to play out in terms of our overall expense trajectory," Wehner said, per the report.
Meta’s most recent quarterly expenditures show that $413 million was spent while it could take nearly $1 billion to end office leases in the next quarter.
Meta spokesperson Andrea Beasley confirmed the decision. Lincoln Property Company declined to respond, The Real Deal reported.
“We are currently evaluating our real estate portfolio globally, and making focused, balanced investments to support our most strategic long-term priorities,” Beasley told the website.
Meta’s announcement follows that of developer Kilroy, which elected to not build a skyscraper in Austin, according to The Real Deal.