Uber to sublease SF offices as it moves to Mission Bay

Uber plans to vacate its four large offices along Market Street in San Francisco as it moves to a new Mission Bay headquarters next year.

The Chronicle has learned that the ride-hailing company is seeking subtenants for a total of 729,352 square feet across four buildings: 71 Stevenson St., 555 Market St., 685 Market St. and its current 1455 Market St. headquarters. The spaces have room for 5,439 employees, according to a new marketing brochure.

Uber’s listings are the city’s largest blocks of available space, excluding office buildings under construction, and could provide some relief for other tenants, said Jesse Gundersheim, director of Bay Area market analytics at CoStar, a real estate data firm.

“The space will be welcomed in a market where vacancy has remained around 6%. However, sublease availability, and the office market’s elevated level of unprofitable tenants, are rising concerns,” he said.

Uber has a new, four-building headquarters nearing completion next to the Golden State Warriors’ Chase Center. At 1 million square feet, it is larger than the buildings Uber is vacating.

Uber declined to comment beyond confirming that it had put the space up for lease. Its plans hadn’t been previously disclosed.

The spaces are available between September 2020 and December 2020, with terms expiring between 2022 and 2025. Asking rents weren’t disclosed, but the market average is around $85 per square foot annually.

With 1.73 million square feet leased, Uber is currently San Francisco’s second-largest private tenant behind only Salesforce, according to brokerage Cushman Wakefield. If it vacates the four buildings it’s subleasing, Uber would drop to the city’s seventh-largest tenant with about 1 million square feet.

The company has faced challenges after years of rapid expansion. Since July, Uber laid off more than 1,100 of its 27,000 employees worldwide.

Uber’s stock price is down over 20% since its public debut in May, though it is still worth almost $56 billion. In the second quarter, the company reported a $5.2 billion loss, including $3.9 billion in stock-based compensation expense, a non-cash charge that many Wall Street analysts ignore.

Still, the company continues to expand in the Bay Area. Uber leased 290,000 square feet in Sunnyvale in June, San Jose Spotlight reported. The company also leased a Palo Alto office in 2016, but scrapped another large office planned in Oakland. It recently signed major leases in Chicago and New York.

Uber’s offices, which feature sleek black color schemes and abundant cafeterias, will be appealing for other companies, said Robert Sammons, Northwest research director at Cushman Wakefield.

“It opens up some prime space for expanding tenants in any industry including, of course, tech,” he said. “Having these blocks available in a still strong market is not a bad thing.”

Roland Li is a Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

Article source: https://www.sfchronicle.com/business/article/Uber-to-sublease-SF-offices-as-it-moves-to-14563416.php

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