Tough business decisions loom.
The rumored second round of layoffs at Twitter – which in 2011 was granted by the befuddled city of San Francisco the ‘Twitter tax break’ on employment taxes – comes at a very inopportune moment for the glory of commercial real estate. These layoffs would amount to 8% to Twitter’s workforce, or about 300 people, according to Bloomberg.
Already, Twitter has thrown 183,642 square feet of vacant office space at its two-building Mid-Market headquarters on the sublease market, thus bringing it to 1.51 million square feet (msf).
This comes at a time when, according to the ‘snapshot’ from Cushman & Wakefield, leasing activity nearly ground to a halt in the third quarter, with only 875,000 sf leased – the lowest since 2001!
There was only one major lease deal over 100,000 sf: Amazon’s live streaming video platform Twitch, which took 178,000 sf. The next largest deal was less than half that size: WeWork leased 78,000 sf.
Leasing activity for the three quarters this year plunged 30% from the same period last year, to just 4.7 msf, according to a report released this week by commercial real estate services firm Savills Studley, which added dryly, ‘The competition for space has calmed dramatically from several quarters ago.’
This post was published at Wolf Street by Wolf Richter ‘ October 26, 2016.
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