The Real Estate Shift in Austin: IBM Takes Over Space from Meta

The Real Estate Shift in Austin: IBM Takes Over Space from Meta

Austin, Texas, is witnessing one of the largest real estate changes in recent times, particularly in the tech sector. The parent company of Facebook, Meta Platforms Inc., is giving up a significant amount of its office space, while IBM Corp. is stepping in to take on the empty space.

A Major Lease Change

On September 5, Cousins Properties, the owner of the Domain 12 office building in North Austin, announced that an unnamed Fortune 100 tech company would be assuming Meta’s lease for a 320,000-square-foot building. Later, an IBM spokesperson confirmed that Big Blue would be the new tenant starting January 1, 2026. This space is located in The Domain, a bustling area with a strong tech presence.

IBM’s Office Plans

IBM is already established in The Domain and had previously arranged to lease space in a new building known as OneTerra, developed by Hines. However, that lease agreement has been canceled. An IBM statement outlined that although the lease at OneTerra was no longer happening, the company has a good relationship with Hines and is looking forward to working together in other ways in the future.

The spokesperson added, “Hines is actively engaged in conversations with other potential tenants.” They emphasized that “Austin is an extraordinary — and growing — center of talent innovation,” indicating IBM’s ongoing commitment to investing in the Austin area, which has been home to them for over 55 years.

Meta’s Downsizing Strategy

On the flip side, Meta has been busy reducing its office presence in Austin. Last November, the company revealed it wouldn’t be occupying the Sixth and Guadalupe office tower that was under construction, despite leasing 586,000 square feet there. That tower has now been completed, but the office space remains unused.

Additionally, in June 2023, Meta announced it was looking for someone to sublease a 120,000-square-foot lease it holds in the 300 West Sixth office tower. Currently, they still have a 320,000-square-foot lease in the Third + Shoal office tower located downtown.

Staffing Dynamics

Despite the changes, Meta is still actively seeking talent in Austin, listing 120 job openings on its website. As per recent data, Meta ranks as the 19th largest tech employer and 29th largest private employer in the Austin area, employing around 1,500 individuals.

In contrast, IBM holds a stronger position in the local job market, ranking as the 9th largest tech employer and 5th largest overall employer in the region with a workforce of about 6,000 employees.

Future Outlook

The shift in office leases between these two major tech players in Austin makes it clear that the local real estate landscape is evolving. While IBM is embracing new opportunities, Meta appears to be shifting away from heavy office commitments. This shakeup could have lasting effects, not just for the companies involved, but for the Austin economy at large.

What Lies Ahead

As companies continue to assess their needs in a post-pandemic world, the decisions of big players like IBM and Meta will be closely watched. Investors and employees alike will be paying attention to how these developments shape the future of Austin’s tech scene.

Overall, it’s an exciting time for Austin, as the outlines of a new office landscape begin to take shape, driven by strong demand for tech talent and innovative workspaces.