Makeover Time: Sephora Subleasing 16 Floors From Salesforce In S.F.’s Biggest New Deal Since 2019
Salesforce has given up another portion of its San Francisco office footprint — and its largest chunk to date.
Beauty retailer Sephora has inked a 286K SF sublease deal with the tech firm, marking the biggest new office lease in the city since 2019. Sephora will be consolidating its two offices at 425 Market St. and 525 Market St. into 350 Mission St., where it will occupy space across 16 floors, the San Francisco Chronicle reports. The Kilroy Realty-owned office tower will serve as Sephora’s new headquarters; it is expected to move in next year.
Salesforce once occupied all 30 floors at 350 Mission — not to be confused — before the pandemic prompted the company to switch to a largely remote workforce and list roughly half of the 450K SF building for sublease. Yelp signed a nearly 54K SF deal for part of Salesforce’s space at 350 Mission last year, according to the San Francisco Business Times.
Salesforce also backed out of a 2018 lease for 325K SF at a project in the city that has yet to be approved. The company still leases 881K SF at the city’s tallest building, Salesforce Tower, and owns about 900K SF across two additional buildings in the city.
Sephora’s lease marks the largest new office deal for the city since November 2019, according to the Chronicle, when Visa leased approximately 300K SF for its headquarters at Mission Rock.
“This move consolidates the number of buildings our corporate employees work in and supports our hybrid in-person and remote work practices while providing ample room for growth as Sephora continues to be a leading employer in the Bay Area,” Jeff Gaul, Sephora senior vice president of store development, said in a statement to the Chronicle.
The move comes as companies continue to push back office returns as a result of Covid-19; Salesforce previously said employees will have the option to work remotely even after the pandemic, with CEO Mark Benioff telling CNBC in June that he expects at least half of employees to remain remote after the pandemic. Google, similarly, has yet to set a mandatory return date for workers.
San Francisco’s office leasing activity picked up in 2021 but is still far behind pre-pandemic levels. Companies leased about 4.8M SF last year, more than double the 2.2M SF leased in 2020, but less than the 7.7M SF leased in 2019, according to Cushman & Wakefield.