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Two weeks after its parent company reported a 15% increase in year-over-year revenue, Google said it will vacate a 300K SF office at One Market Plaza, a 1.6M SF downtown trophy office complex.
The news was first reported by the San Francisco Chronicle.
However, Google will continue to occupy the Landmark building, an 11-story annex of One Market Plaza the company has famously occupied since 2018.
The three-building asset owned by Blackstone and the Paramount Group remains one of San Francisco’s most valuable office properties.
The tech giant decided to move out of its office at One Market Plaza and consolidate operations to 345 Spear St. and other nearby buildings, according to Google spokesperson Ryan Lamont.
Like other Big Tech companies in the Bay Area, Google employees overwhelmingly prefer to work from home or on a hybrid schedule instead of spending five days a week in an office setting.
To that end, Google tweaked its real estate investment decisions in the wake of 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. “We remain committed to our long-term presence in San Francisco.”
Several Google teams have reorganized in the last year, another Google spokesperson said.
“We’re simplifying our structures to give employees more opportunity to work on our most innovative and important advances and our biggest company priorities, while reducing bureaucracy and layers,” the spokesperson said in an email.
A spokesperson for Blackstone and Paramount said when reached by Bisnow Wednesday that One Market Plaza is desirable to office tenants. But the overall office market in San Francisco, especially downtown, continues to struggle. Many properties, One Market Plaza included, have dealt with financing challenges.
In January, Paramount and Blackstone extended a $975M financing package collateralized by One Market Plaza, making a $125M payment on the maturing debt.
Blackstone also closed a $422M CMBS loan for South San Francisco’s Gateway of Pacific, a soon-to-be 2.2M SF life sciences campus, in a $1.2B transaction that also included three Boston-area assets.
Paramount owns six properties in the Bay Area, according to its website.
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