Jun 23, 2023 - Business

Citrix left its Raleigh office. Now comes a search for a replacement

The former Citrix building in the Warehouse District. Photo: CBRE

When Citrix opened its downtown Raleigh office in 2014, it was a major coup for the city.

Driving the news: Less than 10 years later, that same, 170,000-square-foot building at 120 S. West St. sits empty — with Wake County Economic Development and CBRE now trying to find someone to lease it.

Flashback: The arrival of the large tech company was evidence that Raleigh was growing into one of the Southeast's premier tech hubs.

  • And it served as a shot in the arm for the city's Warehouse District, then a quiet area of mostly low-slung brick buildings.
  • "Citrix is what started the Warehouse District," Brad Corsmeier, of CBRE's Raleigh office, said. "Now it's probably one of the more desirable areas in downtown."

Why it matters: The building's fate is a prime example of the uncertainty surrounding offices in a post-pandemic economy, as downsizing companies leave behind large chunks of empty spaces in the country's downtowns.

State of play: Large headquarters have become less attractive to many companies, specifically for tech firms like Citrix that have moved to a remote work model.

  • Vacancy rates in the Triangle shot up to 17.5% in the first quarter of this year, according to CBRE.

Zoom in: Citrix arrived in the region suddenly in 2011, when it acquired a local firm called ShareFile and then promised to hire hundreds in the proceeding years, at one point numbering around 800 on West Street.

  • But after being acquired by a private equity firm in 2022, Citrix faced significant cutbacks, including large layoffs and moved to a more remote working model.
  • That made its large, custom office — featuring shipping container conference rooms and indoor basketball courts — in downtown Raleigh suddenly a lot less attractive.

What they're saying: "It's definitely a new era," Jesse Lipson, the current CEO of Raleigh startup Levitate and the founder of ShareFile, told Axios earlier this year. "The employee headcount, overall, is definitely a lot lower than it was when I left in 2017."

  • "On the positive side" though, he said, "ShareFile is still chugging along and they've got hundreds of employees in Raleigh and trying to get back into growth mode."

What's next: Corsmeier said the goal is to find one tenant to lease the old Citrix building — though admittedly there's not many large companies currently looking to take over that much space at the moment.

  • With patience, though, Corsmeier said the building is still very attractive — especially as it comes with its own parking deck, a rarity in downtown.

"I think when 2025 has started, we're gonna see some better leasing trends in the market," he said.

  • "But there's a reason why Apple is moving forward with their campus, there is a reason why Google is in downtown Durham," he added. "It's because we have a very strong vibrant market with diverse talent."

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