Pinterest Cancels Huge Lease As Workforce Becomes More Remote
Pinterest has bowed out of a 490K SF lease at San Francisco's 88 Bluxome St. as it moves to a more geographically distributed workforce, the social media giant said Friday.
Pinterest, which went public last year, will still occupy four S.F. offices, including its nearby headquarters at 651 Brannan St., but it will no longer be liable for $440M in future lease payments. Its lease agreement at 88 Bluxome now just involves a one-time payment of $89.5M, the company said Friday.
"As we analyze how our workplace will change in a post-COVID world, we are specifically rethinking where future employees could be based," Pinterest Chief Financial Officer and Head of Business Operations Todd Morgenfeld said in a statement accompanying the announcement. "A more distributed workforce will give us the opportunity to hire people from a wider range of backgrounds and experiences."
The move is one of the stronger instances yet of a company moving away from large office locations in favor of distributed or remote work, as well as a sign of a slowed San Francisco office market.
Pinterest's decision to pre-lease 88 Bluxome last March was originally taken by many as a sign of just how tight San Francisco's office market had become. It decided to lease the space before developers Alexandria Real Estate Equities and TMG Partners had even secured full approvals, let alone started building the project.
Alexandria and TMG had originally planned to break ground at 88 Bluxome as early as June before postponing construction after the onset of the coronavirus pandemic, Bisnow reported in April.
Upon approvals, plans for the site include about 775K SF of office, up to 118 affordable units and 134K SF for a new tennis club to replace the existing San Francisco Tennis Club. Designs have called for three buildings between 85 and 243 feet in height and a combined 17K SF of retail and restaurant space
Neither Alexandria nor TMG Partners immediately responded to requests for comment Sunday.