By Meghan Hall
The pandemic has been particularly tough on the hospitality and travel industries, and those impacts are beginning to show, even for major companies. According to industry reporting by the Hong Kong Economic Times and South China Morning Post, Seattle-based firm Expedia has elected to walk away from a 25,000 square foot lease at The Center in Hong Kong. Expedia was two years into the four-year lease.
The lease, according to sources, runs just under $225,800 per month for the company and is set to expire in June of 2022. The Center, which stands 73 stories tall, is nearly 1.4 million square feet and is the fifth tallest building in Hong Kong. It was completed in 1998.
Expedia’s decision to end its lease follows on the news that the online travel agency announced in February that it would be laying off 3,000 staff around the world. Expedia reportedly had about staff in Hong Kong. Expedia, according to an April Hong Kong report issued by Cushman and Wakefield, is not the only firm backing away from leasing commitments. Over the past several months, the market recorded a net withdrawal of 525,000 square feet, pushing availability rates up to 10 percent.
Back in the Puget sound, Expedia moved its headquarters from Bellevue to just south of downtown Seattle in the fall of last year. The office which was years in the making, accommodates more than 4,000 employees. Expedia had planned to move its entire workforce into the building by February of this year. Prior to COVID-19, the firm had intentions to expand its local staff in the region. However, expansion may remain elusive: Expedia’s stock has fallen from $135 per share to $46 in recent weeks as a result of the recession.
How the Puget Sound’s office market will fare in the coming weeks as companies continue to evaluate the market largely remains unseen. In a Puget Sound report released in April—the most recent available—Cushman and Wakefield predicted that the second quarter would see economic fundamentals take a hit. What remains to be seen, even now, is how the commercial real estate market will follow.