Meta leases up all office space in Austin’s tallest tower in historic deal

Months of speculation have come to an end as California-based Meta Platforms Inc. — the parent company of Facebook — recently leased the entire commercial half of Sixth and Guadalupe, the 66-story high-rise under construction that will be Austin’s tallest building when finished.

Meta confirmed to Austin Business Journal that it leased 589,000 square feet of office space across 33 floors at Sixth and Guadalupe, located downtown at 400 W. Sixth St. The lease was signed Dec. 31.

“We first came to Austin over 10 years ago with just seven employees, now over 2,000 of us are proud to call Austin home. We’re committed to Austin and look forward to growing here together,” Katherine Shappley, head of Meta’s Austin office and vice president for commerce customer success, said in a statement.

California-based Meta also announced it is looking to hire 400 more people in Austin. As of last summer, the company had about 2,000 local employees, which ranked No. 25 among the largest private-sector employers in the region. Given the new lease and other Meta offices in Austin, the company could grow significantly beyond that mark in coming years.

The 589,000 square feet of office space in Sixth and Guadalupe is larger than the entire Frost Bank Tower. Only one building has more available office space in the Central Business District: Indeed Tower with 720,000 square feet.

In addition to the office space, Sixth and Guadalupe will have 349 residential units on floors 34 to 66.

This appears to be the second-largest single office lease ever in downtown Austin. Google has leased all of the Block 185 tower under construction at 601 W. Second St., which has about 720,000 rentable square feet.

The lease signing also points toward renewed optimism by large tech employers about the return to the office, despite the recent surge of Covid cases due to the Omicron variant. Meta has announced plans to re-open its U.S. offices at the end of January, although employees could defer their return until June.

Of course, it will be much later than that before Meta begins occupying Sixth and Guadalupe. Construction on the commercial portion topped out late last year, and the building is expected to be completed in 2023.

Rumors about Meta leasing in Sixth and Guadalupe have been rampant for more than a year, back when it was still known as Facebook. Facebook appeared to be on track to lease all 353,000 square feet of 300 Colorado, but those negotiations abruptly ended in March 2021. Sources told ABJ in August a deal at Sixth and Guadalupe was close to happening.

Prior to the Meta lease at Sixth and Guadalupe, the largest office lease in Austin since the start of the pandemic was Cloudflare Inc. (NYSE: NET), a San Francisco-based web infrastructure and security company, eating up 125,000 square feet at 1600 E. Fourth St. in August.

A Meta spokesperson said the new lease is “to help accommodate our growing teams,” suggesting the company will hold onto its other downtown office spaces. It leases multiple floors in the 300 West Sixth tower and in 2019 opened a 256,500-square-foot office in the Third + Shoal tower, where it had leased 11 floors. And in North Austin, the company has leased all the office space in the 17-story Domain 12 tower, which is roughly 320,000 square feet.

Meta Platforms (Nasdaq: FB), which rebranded in October, saw its market capitalization jump from $416 billion to about $902 billion since the start of the pandemic, according to a Business Journals analysis of stock market data. It is one of the most valuable technology companies in the world, although it has also attracted scrutiny because of its size and what some critics call an unsafe platform.

Sixth and Guadalupe is being developed by Dallas-based Lincoln Property Company Commercial Inc., San Antonio-based Kairoi Residential LLC and San Francisco-based Divco West Real Estate Services LLC. San Francisco-based Gensler is the tower’s architect and Kansas City-based JE Dunn Construction Group is general contractor.

The tower, previously called 6 X Guadalupe, will reach 875 feet in height and be the first Austin high-rise of 1 million square feet, between the office, residential, retail and outdoor spaces.

The Independent, at 58 stories and 694 feet tall, currently holds the title of Austin’s tallest building.

Courtesy of Austin Business Journal. See the full article here.