Seattle, known for its bustling tech scene, is witnessing a significant shift in its office space landscape as companies reevaluate their workspace needs in the wake of evolving work dynamics and market conditions. One notable example is Flyhomes, a Seattle-based real estate tech company, which recently downsized its downtown office. This move is emblematic of a broader trend in the city, with other major players like DocuSign, Meta (formerly Facebook), and Oracle also shedding office space.
Flyhomes’ decision to reduce its office footprint reflects a strategic response to changing circumstances. The company, which had occupied a 9,000-square-foot office near the waterfront, made the move to a more modest 4,000-square-foot space in the Logan Building on Union Street. Justin O’Neill, a company spokesperson, explained in a report by the Puget Sound Business Journal that Flyhomes signed its lease for the larger space before the onset of the Covid-19 pandemic when remote work was not the norm. However, the pandemic reshaped the company’s perspective on office space, prompting them to reevaluate their needs.
O’Neill emphasized that Flyhomes still maintains a physical presence for certain team meetings and daily operations. Nevertheless, the downsizing was driven by a reduced need for office space, stemming from changes in work habits and three rounds of layoffs since July 2022, which occurred amidst a cooling housing market. Flyhomes’ employee count, which was around 820 at the beginning of 2022, has now dwindled to fewer than 400.
Flyhomes is not alone in its downsizing endeavors. DocuSign, Meta, and Oracle have collectively freed up nearly 330,000 square feet of office space in Seattle. This trend aligns with a recent office market report from CBRE, which highlighted the city’s declining lease rates and diminished demand.
Meta vacated a 150,618-square-foot office space, while Oracle reduced its presence by almost 99,000 square feet. DocuSign also scaled back, shedding 77,951 square feet. These moves have added to the excess office space inventory in Seattle, a situation exacerbated by previous departures from tech giants like Amazon and Zillow.
Despite the challenges facing Seattle’s office market, the CBRE report offers some silver linings. Smaller users, including law firms and companies in coworking setups, have been quick to occupy vacated spaces once dominated by tech giants. Additionally, there is a noticeable uptick in lease renewals, as larger companies seek flexibility in their real estate portfolios while navigating the evolving landscape of hybrid work models. Amazon, for instance, renewed a space in the Denny Triangle for at least two more years, exemplifying this trend.