Google Renews A San Francisco Office Lease For 54% Less Space
Google will cut its space at 215 Fremont St. in downtown San Francisco by 54% as it renews its lease in the building, marking the latest office downsizing for the tech giant.
Going forward, Google will lease 64K SF, down from its previous 140K SF. Clarion Partners and LPC West bought the building in 2019, the San Francisco Chronicle reported.
The smaller lease mirrors other deals taking place in the Bay Area as companies rethink their space needs in the new hybrid work environment.
“Due to the remote/hybrid environment that many tech players instituted during the pandemic there was less space needed,” Cushman & Wakefield Senior Research Director Robert Sammons told Bisnow via email. “It appears that most of the consolidation in San Francisco from the bigger tech players has already occurred.”
He said the trend started in 2021.
Google employees, like their peers in the tech industry, are working from home or are on a hybrid schedule instead of spending five days a week in an office.
In early May, Bisnow reported that Google planned to vacate 300K SF at the Landmark building of One Market Plaza, a 1.6M SF downtown trophy office complex.
The move-out occurred as part of the company’s decision to consolidate operations to 345 Spear St. and other nearby buildings, Google spokesperson Ryan Lamont told Bisnow in May.
Despite the consolidations, Google retains a significant presence in San Francisco, with office leases at the Landmark at One Market, the Ferry Building, Hills Plaza and One Maritime Plaza, the Chronicle reported. However, the tech giant is no longer gobbling up space like it did before the pandemic.
“As we’ve said before, we’re focused on investing in real estate efficiently to meet the current and future needs of our hybrid workforce,” Lamont wrote in an email to Bisnow in early May. “We remain committed to our long-term presence in San Francisco.”
Class-A vacancy in San Francisco reached a new record high of 34.5% in the second quarter, according to C&W data. Rents, while down significantly from before the pandemic, held steady on a quarterly basis at $73 per SF.
“With AI companies as more of an in-office environment and other tech companies now instituting at least a hybrid environment, occupancy should improve,” Sammons said.
