Salesforce and Meta are looking to sublease significant portions of their downtown office space, spokespeople for both companies confirmed.
Both tech companies announced mass layoffs in recent months. The downtown sublets were first reported by CoStar News.
A Salesforce spokesperson confirmed Friday that the company planned to sublease about 125,000 square feet of office space in the 1.2 million-square-foot Salesforce Tower at Wolf Point along the Chicago River downtown, a figure that represents about a quarter of the space it originally planned to occupy in the building. The company said last year it planned to move employees into the tower this spring. On Friday, a spokesperson said Salesforce staff would start working there in June.
In January, Salesforce announced plans to let go of about 8,000 employees, or about 10% of its workforce. A company spokesperson declined to specify how many affected workers were based in Chicago. As of 2021, Salesforce had more than 2,000 employees in the Chicago area.
Meta, which has also announced massive job cuts in recent months, confirmed plans to sublease five floors, or about 115,000 square feet, of its office space at 151 N. Franklin St. That represents nearly 44% of its space in the building, which it leased in 2018.
Meta announced 11,000 layoffs last fall and announced another 10,000 cuts earlier this month.
“The past few years have brought new possibilities around the role of the office, and we are prioritizing making focused, balanced investments to support our most strategic long-term priorities and lead the way in creating the workplace of the future,” a Meta spokesperson said in a statement. “We remain committed to Chicago and look forward to years of innovation ahead.”
Meta’s agreement to occupy 263,000 square feet in 151 N. Franklin St., now called CNA Center, made it one of the largest tenants, according to CoStar. CNA Insurance established its 298,000-square-foot headquarters there when the 35-story West Loop tower, developed by John Buck Co., opened in 2018, while law firm Hinshaw & Culbertson occupies several floors in the almost fully leased building.
CNA Center includes a rooftop garden, an outdoor terrace on the second floor and a public plaza, amenities sought by many companies trying to bring people back from comfy home offices, so Meta’s offering may attract a lot of interest. But that could also mean more bad news for the Central Loop. Packed with older buildings offering fewer amenities, its landlords already struggle to keep their remaining tenants.
Although many Chicago companies were reluctant to sign new leases or expand their footprints in 2022, the vacancy rate for top West Loop office properties fell to 15.1% by the end of the year, according to Colliers International, while the Central Loop hit a historic high of 25.9% as employers there shed space. Top River North properties saw their vacancy rate sink to 13.5% in 2022.
Salesforce Tower, located at 333 W. Wolf Point Plaza west of the Merchandise Mart, will start filling up this spring. Its Houston-based developer Hines signed a 500,000-square-foot lease agreement with Salesforce in 2018, also giving the software firm naming rights to the 60-story tower, designed by Pelli Clarke Pelli Architects.
Hines broke ground weeks after the COVID-19 pandemic hit in early 2020. Salesforce Tower was the last of three buildings at the developer’s Wolf Point complex, with the first pair dedicated to residences. In 2021 law firm Kirkland & Ellis, now located at 300 N. LaSalle St., signed a deal to occupy 662,000 square feet.
Both Salesforce and Kirkland & Ellis will move in starting April 1, according to CoStar.
