Block Is Latest Defector From Downtown San Francisco, Giving Up 470K SF
In yet another blow to San Francisco’s struggling office market, Block Inc. will not renew its 470K SF lease at 1455 Market St. as it moves to a largely remote work model, as first reported by the San Francisco Chronicle.
The lease on the property is set to expire in September 2023.
The company will consolidate its remaining offices in an effort to reduce its overall real estate costs, retaining only two offices in San Francisco, a 52K SF space at 760 Market St., which came along with its purchase of e-commerce company Afterpay, and 60K SF at 2101 Mission St.
Block will maintain a presence in the greater Bay Area, keeping its offices in Oakland's Uptown Station. The company is also planning to open another smaller office space in the South Bay in the latter half of 2023.
Hudson Pacific Properties owns 1455 Market St., a 23-story, 1M SF property that houses Uber's corporate headquarters and sits in a district populated by tech companies. Block, then Square Inc., leased an extra 104K SF in the Market Street location in the summer of 2018, as reported by the San Francisco Business Times. Cushman & Wakefield handles leasing on the property.
San Francisco's office woes seem to only be deepening as the list of big-name tech companies vacating their offices grows longer.
Among the more recent examples are TaskRabbit’s departure in May and PayPal vacating its offices in April. Adding to the tension are economic factors such as inflation and the dramatic slide in crypto prices that precipitated Coinbase's Tuesday announcement that it would cut 1,100 jobs.
Meanwhile, the commercial real estate industry hopes that big tech companies will make a resurgence, filling the void in the San Francisco office market, which carries one of the highest vacancy rates in the country.