One of the biggest names in tech is pausing its Boston-area expansion plans, the latest sign that working from home may be here to stay, even for companies that made pandemic-era bets on the office.
Facebook parent Meta Platforms Inc. confirmed this week it will delay the buildout of 250,000 square feet of office space in Cambridge’s Kendall Square in order to redesign it for a hybrid work environment.
The move comes just seven months after Facebook signed a lease for the space at 50 Binney St., one of several big deals last year that suggested companies were considering a return to pre-pandemic norms, as well as a sign of optimism for the Boston and Cambridge office markets. Now the company is pausing construction as it works toward “incorporating lessons learned into designing our new spaces to best support the needs of our workforce,” said spokesperson Jamila Reeves.
“The past few years have brought new possibilities around the ways we connect and work. Like many other companies, we are working to ensure we’re making focused, balanced investments to support our most strategic long-term priorities given the current economic climate,” Reeves said. “We remain firmly committed to the Boston-Cambridge community.”
As Boston’s once-red-hot office market hit the brakes during the pandemic, large technology firms including Facebook, Amazon, Apple, and Google were among the few blue-chip companies making big commitments to new space. Google is nearly done with a new tower in Kendall Square, where Apple is also expanding its local office, while Amazon in January 2021 leased an entire second building in the Seaport, which recently launched construction.
Now though, Facebook is pausing its office expansion here and in New York, where Amazon is also pulling back, Bloomberg reported last week. Amazon has also paused construction on several towers in the Seattle-area city of Bellevue, along with a second tower in downtown Nashville, according to media reports. In both cities, Amazon said it would pause to reevaluate office design in a hybrid work world.
In Boston, though, Amazon appears to be staying the course on its real estate plans. In June, the e-commerce giant opened the first of two large offices in the Seaport — one of the few new offices built and opened since COVID-19 came to the United States — which has about 2,000 people. The second building, at 1 Boston Wharf Road, is on track to open in 2024 and could expand the company’s local workforce to 4,500 tech and corporate employees.
Amazon’s growth plans in Boston are “not affected” by the construction pauses in Nashville and Seattle, said Adam Sedo, an Amazon spokesperson, in an e-mail to the Globe. The company has more than 1,300 open positions here.
“Our hiring plans in the city remain unchanged,” Sedo said.
Meta’s construction pause comes at a time when availability of office space has increased in Greater Boston for the first time in a year, and other big-name tech companies, including Akamai Technologies and Wayfair, have said they intend to sublease some of their existing space — opened not long before the pandemic — to other firms.
And redesigning office space for a post-pandemic, hybrid work world has been top of mind for many companies in Greater Boston. State Street Corp. has changed the layout of its new headquarters under construction at the One Congress office tower to incorporate an unassigned desk arrangement, with four different types of workstations. Across the river in Cambridge, Akamai is subleasing four of its 19 floors and reconfiguring the remaining space. Some 95 percent of Akamai workers can work remotely forever, if they choose.
And when Boston-based software firm Immuta sought new offices during the pandemic, it wanted more room than usual in order to offer employees more collaboration space and make coming into the Seaport location worthwhile.
”Pre-pandemic, when we were doing real estate surveys, we would give probably about 100 square foot per employee,” said Jason McCluskey, Immuta’s director of global workforce and real estate. “COVID ... kind of shifted up to about 200.”
A recent report from real estate firm Colliers indicated many landlords have concerns about tenants downsizing footprints while considering in-person versus hybrid work preferences — which is especially concerning for owners of older buildings where vacancy rates are higher. It’s prompting many real estate owners to consider converting their existing empty offices to lab space. Until recently, big new buildings in neighborhoods with lots of demand from the life sciences industry, such as Kendall Square, have kept their value.
Indeed, in December, developer Alexandria Real Estate Equities sold a major stake in 50-60 Binney St. — the very building where Facebook is now pausing its buildout — to Norges Bank and MetLife for $1.2 billion, touting the complex’s fully leased status to explain the enormous sum.
How long Meta’s construction pause in Boston will last is not clear. The company has 43 open positions listed in the Boston area, and job ads say many of those positions could be remote. The company has about 500 local employees, based at its existing office across the street at 100 Binney, who have largely been working remotely since the COVID pandemic hit Boston in early 2020.
Anissa Gardizy of the Globe staff contributed to this report.