Tech giant Alphabet is further scaling back its office space, this time with plans to consolidate in Washington, D.C., even as it reports another quarter of surging revenue and capital spending plans.
The Mountain View, California-based company is expected to ditch its roughly 100,000-square-foot space at 25 Massachusetts Ave. in the city's East End, a property that has long housed its legal, government affairs and engineering teams. Google has leased three entire floors in the nearly 385,500-square-foot building for more than a decade.
Yet similar to other tech companies across the country, Google is now looking for ways to cut down on some expenses to redirect the capital to higher-priority investments such as artificial intelligence and data center development.
A Google spokesperson neither confirmed nor denied the company's anticipated move-out, expected to occur later this year. Instead, Global Communications and Public Affairs Lead Ryan Lamont told CoStar News that Google has multiple offices across the D.C. area and the company has not finalized any plans for its future space in the region.
While Google's lease isn't set to expire until 2030, landlord Norges Bank Investment Management has already enlisted help from Newmark to begin marketing space across the property's top three floors.
The landlord did not respond to CoStar News' requests for comment.
The Alphabet subsidiary's hesitancy over extending its presence in the 25 Mass building is an interesting contrast to the rampant investments the tech giant is making elsewhere across its global real estate portfolio.
The parent company on Wednesday reported a 22% spike in first-quarter revenue as the artificial intelligence race boom rippling around the world fueled growth for its cloud business. Sales surged to about $110 billion, and Alphabet reported net income of $62.6 billion, an 81% increase compared with the same period last year.
Redirected attention
Alongside other global tech companies such as Meta, Amazon, Microsoft and OpenAI, Alphabet has been funneling the bulk of its investments toward building out its stake in the AI industry, spending heavily to advance AI models and build the data centers necessary to train and run them.
Earlier this year, Alphabet executives told analysts the company would double its capital expenditure budget this year, estimating it will spend up to $185 billion to solidify its position at the forefront of the AI race.
In contrast, Alphabet's budget was about $93 billion in 2025.
AI is "lighting up every part of the business,” said Chief Executive Sundar Pichai.
One part of the company that isn't shining as bright: its office portfolio.
The company's wobbly D.C. presence is an extension of Alphabet's yearslong office downsizing efforts, moves that have cost the company more than $1 billion in lease termination expenses as it has vacated hundreds of millions of square feet of space. The bulk of those move outs and subleasing efforts have been concentrated around its Silicon Valley headquarters, most recently with Google's exit last year from a 300,000-square-foot office it had along the San Francisco waterfront.
Google declined to comment on where its other D.C. outposts are located or how many employees are housed there. The company in early 2022 took over about 130,000 square feet in the nearby building at 655 New York Ave. NW, and a year later put out spatial requirements for more as it looked to boost its workforce in the area.
That's in addition to the more than 165,525 square feet that Google leases out in Reston, Virginia, where it anchors the building at 1900 Reston Metro Plaza.
That lease, which took effect in early 2020, is scheduled to expire in 2028.