Google Takes Over Stripe’s San Francisco HQ
USA – A number of sources have disclosed that the cloud computing arm of Google has taken over all of the space at Stripe’s former headquarters space at the 510 Townsend office building at South of Market (SoMa), reported the San Francisco Business Times on Saturday (2 July, SGT)
The insiders revealed that 300,000 sq ft sublease at 510 Townsend has been under deliberation for months and a deal was concluded on Thursday. It marks the largest new lease or sublease in San Francisco since the onset of the COVID-19 pandemic.
Property consultancy CBRE acted for both Google and Stripe. However, the details of the transaction have not been made public. The latter’s lease at the seven-story office block controlled by Singapore-listed Ascendas REIT is until 2027, and the payment processing firm paid a starting office rental rate of US$72 psf when it first moved into the office building in 2015.
But months after the start of the virus outbreak, Stripe put up the commercial property for sublease as it intends to relocate to South San Francisco. The payment processing firm only leased 510 Townsend for roughly four years when it signed a new office lease in October 2019 to occupy over 400,000 sq ft at a large office and life science development owned by Kilroy Realty Corporation in Oyster Point.
Stripe agreed to lease the space almost two years before the mixed-use commercial property was expected to be finished. And it’s now moving about 1,000 staff into what’s deemed as the biggest biotech cluster in the US. Stripe’s lease at Oyster Point will run until 2033.
510 Townsend was still owned by a joint venture (JV) comprising TMG Partners and Alexandria Real Estate Equities, when Stripe put it up for sublease. But a month later, Ascendas REIT entered into a deal to acquire the commercial property along with another office building that was occupied by Pinterest for a total of US$572 million.
Google’s move brings good news to San Francisco’s office market, including that of SoMa, which has been badly impacted by the prevalence of working from home (WFH), as San Francisco officials forecasted that 33 percent of the city’s manpower would telecommute permanently.
Furthermore, data from CBRE showed that the office vacancy level in the city edged up to 24.5 percent in Q2 2022 from 23.8 percent in the preceding quarter. Google’s sublease at 510 Townsend is excluded in the latest data.
The latest projections indicated that the city’s downtown could record vacancy rates ranging between 35 percent and 50 percent in particular places. Specifically, the office vacancy level in SoMa could reach 42.7 percent come 2024.