Big Tech has slashed its office presence in San Francisco by half

From the article:

By the end of 2019, the 20 biggest tech employers had leased more than 16 million square feet of space, nearly a quarter of the city’s total office stock. Now, those same companies are holding onto only 8.3 million square feet, according to data from real estate firm CBRE.

…

A few key examples: Last January, Meta listed all 34 floors, or 435,000 square feet, of its office space at the glitzy 181 Fremont skyscraper for sublease after announcing mass layoffs tied to cost-cutting efforts. A company spokesperson confirmed Meta kept one office location in the city at 250 Howard St., where it still leases all of the office space at the 43-floor tower.

Uber followed Mark Zuckerberg’s lead and put a portion of its massive Mission Bay headquarters campus up for grabs months later, with two buildings eventually snapped up by OpenAI last October.

The city’s largest private employer, Salesforce, said in a recent securities filing that it now owns or leases less than 45% of office space it had from the year prior—about 900,000 square feet, down from 1.6 million, as of last January. “Our offices remain a critical part of our culture here in San Francisco, our global headquarters, and around the world,” a Salesforce spokesperson said in a statement.

…

Since most office buildings are tied to a commercial loan, distressed landlords not collecting steady rent checks have either had to walk away from properties or sell at a steep discount. Only once that cycle is completed—and pre-pandemic rates flushed out—can rent costs finally be reset, experts say.

Take the 22-story office building at 350 California St. as a model. In September, San Francisco real estate developers SKS Partners and the Swig Company partnered to purchase the property for around $61 million, roughly 75% off the price it went for in 2020.

With a lower cost burden, the new landlords were able to ink two new office tenants that likely wouldn’t have been able to afford the location previously. In January, nonprofit developer Bridge Housing nabbed the entire 16th floor, while climate innovation coworking company 9Zero took the fourth floor days after.