SAS Institute, one of the Triangle’s largest employers, is shrinking its footprint.
A month after cutting roughly 1% of its workforce, the software giant has offered two 1980s-era buildings for sublease on its headquarters campus off North Harrison Avenue in Cary, directly across from The Umstead Hotel and Spa.
A SAS spokesperson said the decision was based more on employees opting to work remotely post pandemic than on the layoffs.
“We continue to provide a flexible work environment,” Shannon Heath told The N&O in an email. “As such, we want to use our office space more efficiently.”
Employees who prefer to work on campus have been relocated from partially occupied buildings to other areas of campus, she said. “[It will] maximize building occupancy and operational efficiency, as well as enable even more collaboration on campus.”
Buildings H and J — totaling some 164,385 square feet of Class B office space — have a lease rate of $23 per square foot and are being marketed by Cushman & Wakefield, according to the Triangle Business Journal.
SAS, a $3 billion analytics company founded at NC State by its longtime CEO Jim Goodnight, has been based at its current campus since 1980.
In July, it confirmed cutting positions ahead of its initial public offering, which is expected sometime next year. The most recent county data says SAS employed around 4,000 people in the Triangle.
Office market remains ‘anemic’
The SAS buildings are now among several prominent office spaces sitting on the market, as the rise of hybrid work, surging interest rates and tech layoffs push sublease vacancy rates to record highs across the Triangle.
Citrix’s former headquarters recently became available for sublease in Raleigh’s Warehouse District. Across town, just off Interstate 40, IQVIA’s 260,000-square-foot space is also empty in one of Durham’s most prominent office towers.
In total, roughly 4.4 million square feet of sublease office space remains vacant across the Triangle, according to CBRE Raleigh Research’s second-quarter market report.
That’s roughly 8.2% of overall market inventory and a steady record high, surpassing the previous high-water mark of 5.3% in the aftermath of the dot-com bust and the 9/11 terrorist attacks.
“Tenant demand continues to be anemic across the market,” CBRE Raleigh senior research analyst Elizabeth Gates said in July.
Derek Jacobs, a Raleigh-based analyst with Avison Young, remains optimistic about the Triangle’s prospects Nor is he too concerned with SAS’ latest offering.
“I don’t think any alarms should go off because of it. It fits in with larger market trends,” he said.
In the short term, he expects more uncertainty as employers continue to assess their needs, but eventually it will shake out. “Once there’s a status quo, there’s going to be a shift,” he said. “It’s just hard to say when that’s going to be.”