Red Hat Tower has been a defining characteristic of the Downtown Raleigh skyline for years. But while the Red Hat logo still hangs over East Davie Street, many of the workers that used to fill the building are now working from home. 

As tech firms across the country re-evaluate their office footprints in an effort to control costs – could Red Hat Tower be the next to hit the market?

Right now, the company, which has about 2,000 local employees, is not “pursuing a sublease strategy” for Red Hat Tower, a Red Hat spokeswoman said. The building includes approximately 380,000 square feet of office and retail space and an integrated parking deck. 

The company entered into a sublease for the building at the end of 2011. The sublease expires in 2035.

But that doesn't mean the way Red Hat operates in Downtown Raleigh won't change as remote work, in some form or another, becomes part of the new normal across the tech industry. 

“We are constantly evaluating our workplace portfolio both locally and globally to ensure we understand the real estate market dynamics managing the effective use of our real estate assets,” said spokeswoman Stephanie Wonderlick. 

Any significant change could have a ripple effect across the entire region, as Red Hat has long been a leading tech employer – part of the narrative behind Raleigh's innovation economy. 

The company, now a subsidiary of IBM (NYSE: IBM), is still embracing what Wonderlick describes as “associate flexibility,” which includes both hybrid and in-person work activities. 

Covid-19 pushed much of the Triangle’s tech workforce remote – changing how companies utilized office space. ChannelAdvisor, for example, started reducing its space in Morrisville. As did Citrix in Raleigh. The company recently put most of its downtown building up for sublease.

At the end of 2020, the vacancy rate for Class A office space in Downtown Raleigh was about 4.9 percent. Last year ended with a rate of more than 11.4 percent.

Red Hat declined to say how many workers are regularly coming to its downtown office.

The Business Journal’s recent downtown vitality report shows 31 percent of Downtown Raleigh workers now claim to work from home. At Red Hat, the numbers are likely higher. A 2022 blog post by Jennifer Dudeck, senior vice president at Red Hat, said that 30 percent of its employees were already working remotely pre-pandemic.

“We’ve expanded the flexibility by offering the majority of our associates the freedom to be ‘office-flex,’ where they can come to the office as much as they need to, or not at all if they choose,” she stated.