In a surprising turn of events, Snap Inc., the parent company of the popular social media platform Snapchat, is reportedly reconsidering its office expansion at the Santa Monica Business Park (SMBP), located at 3420 Ocean Park Blvd. Sources have revealed that the tech giant may significantly reduce its office space at SMBP, a move that reflects shifting priorities and the evolving nature of work in the tech industry.
The exact scale of the downsizing remains uncertain, with varying estimates provided by different sources. One source suggests that Snap Inc. may cut approximately 160,000 square feet, while another claims the company is exploring a reduction of around 75 percent, which would amount to relinquishing more than 300,000 square feet of office space, according to a recent report in the Commercial Observer.
The decision has left many in the commercial real estate industry and the business community curious about the motivations behind this change. However, neither the landlord, Boston Properties (BXP), nor Snap Inc., has provided any official comments or additional information regarding the matter, leaving room for speculation.
Snap Inc. initially leased approximately 300,000 square feet of space at SMBP in 2017 as part of a 10-year deal to establish its new headquarters. At that time, the SMBP campus already hosted prominent tenants such as video game producer Activision Blizzard and music and radio streaming platform Pandora. Subsequently, in the summer of 2021, Snap Inc. made headlines by expanding its presence at SMBP, adding another 145,000 square feet by taking over a significant portion of the space vacated by Activision Blizzard.
However, the dynamics within Snap Inc. seemed to shift in the following months. In August 2022, the company announced a workforce reduction of 20 percent, signaling a need for operational adjustments. This move was followed by another significant announcement in which Snap Inc. stated that its employees would be required to work in the office four days a week, according to reports from Bloomberg. These changes in company strategy appear to have played a role in the decision to reevaluate the expansion plans at SMBP.
Boston Properties acquired a 55 percent ownership stake in the 1.2 million-square-foot SMBP on Ocean Park Boulevard from Blackstone (BX) for $627.5 million in 2018. The company’s ability to adapt to changing tenant needs and market conditions will be closely observed as Snap Inc. and other tech companies continue to navigate the evolving landscape of work arrangements.
