T
he office real estate scene in Austin, TX is constantly changing, as one company's departure can often lead to another company's gain. This is exactly what happened when Meta (NASDAQ:META) decided to leave its lease in The Domain, a mixed-use neighborhood that includes several office towers. The company had leased Domain 12, a 15-story glass tower, but as of Jan. 1, 2026, IBM will be taking over 320,000 square feet of office space. This new lease will extend the lease maturity from 2031 to 2040, providing IBM with a long-term commitment to the area.
IBM has a rich history in the area now known as The Domain. The original 235-acre IBM research campus was sold in 1999 for $60 million, and IBM leased back part of the property. The company announced plans to relocate to a new campus by 2027, and was eyeing OneTerra, a 507,200-square-foot office project being developed by Hines Real Estate. In a statement, IBM emphasized its commitment to investing in new experiences for both its clients and employees in this market.
This move is a win for Cousins Properties (NYSE:CUZ), an office REIT that owns the building. The company's Domain portfolio comprises an impressive 2.5 million square feet and is currently over 99% leased. According to Colin Connolly, President and Chief Executive Officer of Cousins Properties, "The Domain provides a highly amenitized experience that leading companies recognize as a critical tool to drive employee recruitment, retention, and culture. We are thrilled to see growing customer demand for lifestyle office properties in Austin."
Meta has been rethinking its relationship with office properties in Austin and elsewhere. Over the past few years, the company has tried to leave around one million square feet of office space in Austin. In 2022, it announced that it would not be moving into the 586,000-square-foot space it leased at the recently completed Sixth & Guadalupe Tower, currently the tallest in Austin at 865 feet. Last year, the company also put 120,000 square feet at 300 West Sixth Street into the sublease pool. It still has 320,000 square feet of space at the Third + Shoal building.
Meta's office footprint is also shrinking in Bellevue, WA, where it has leased several properties, some of which are now up for sublease. Last year, it subleased its space in Fremont, CA, to a pharmaceutical company. It listed its 435,000-square-foot space at 181 Fremont in San Francisco for sublease in 2023 and potential interested tenants have included TikTok and Zendesk.
The Austin office market has been experiencing a lot of supply coming online at the same time that many companies are reconsidering their relationship with office space. While many tech companies have at least some footprint in the booming state capital, some have been reducing or scaling back their efforts. In recent months, as much as 20% of Austin's office space has been vacant. Deals are still getting done, but they are often smaller leases under 100,000 square feet as companies reconsider their relationship with large headquarters.
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