Behind The Deal: Stripe's Mega Lease

Stripe, which has been on the prowl for needed space since at least last fall, just sealed a 300k SF HQ lease for 510 Townsend. We just got off the phone with the lucky landlord, Alexandria Real Estate Equities.

Alexandria Real Estate Equities Inc/Steelblue

We broke the news about the startup's new address in SoMa, and Alexandria CEO Joel Marcus just confirmed the done deal. The long-term lease is at market rent, he adds. Joel says the biggest reason Stripe picked 510 is because tech companies here—especially "unicorns"—are fast-growing firms of the future that don't want to be in traditional high-rise offices. He says the company wanted a campus style in a unique and iconic building that mirrors its DNA. On the wish list: interiors that are collaborative and comfortable to help recruitment and retention. "We put together a building design they loved," Joel says. A proprietary rendering, above.

Stripe is currently in an old trunk factory at 18th and Folsom (above), and it's unclear if that space will be retained. Joel says there was a lot of interest in 510 Townsend and it came down to two parties (he declined to name the other finalist). "Stripe got across the finish line first," he says, adding the competition drove a quick deal, taking just a few months. Expect a move-in in 2017.

The new address is considered one of the highest-quality development parcels in SoMa (at the corner of Townsend and Sixth). A year ago, an affiliate of Alexandria Real Estate bought the 1.23-acre development site zoned for 300k SF. Stripe, which helps power online and mobile payments systems for Apple, Twitter and Alibaba, counts Sequoia Capital, Peter Thiel and Elon Musk as investors. The company is valued at about $3.5B.

Alexandria Real Estate Equities Inc/Steelblue

Once completed, the building will have a rooftop deck, great views of SoMa and Mission Bay, and food and fitness amenities (here's another rendering). As for the mega project it's working on nearby for Uber, Joel says Alexandria is getting close to finishing design and working on construction pricing. That project will break ground late this year or early next year, he says.

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