February 24, 2024

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Google’s cloud computing division has subleased a 300,000-square-foot office building in San Francisco that once served as headquarters for the financial tech firm Stripe.
The Mountain View-based tech giant subleased the seven-story building at 510 Townsend Street, next to the 280 Freeway terminus in the South of Market neighborhood, the San Francisco Business Times reported. Financial terms of the deal were not disclosed.
Stripe’s lease from building owner Ascendas Real Estate Investment Trust runs through 2027. The financial tech firm paid $72 per square foot when it set up shop in 2015. Stripe has moved its headquarters to a 400,000-square-foot building at Oyster Point in South San Francisco.
The Google Cloud deal is the second-largest lease or sublease in the city since the pandemic began more than two years ago. The largest was made by Wells Fargo, which renewed a lease for 622,300 square feet last month in the Financial District.
The building at 510 Townsend had been co-owned by Alexandria Real Estate Equities, based in Pasadena, and San Francisco-based TMG Partners when Stripe listed it for sublease in 2020.
Ascendas, a unit of Singapore investor Capital, bought it a month later for $572 million along with another building leased to Pinterest at 505 Brannan Street.
The Google Cloud sublease in SoMa is a boon to a turbulent office market in San Francisco.
The office vacancy rate rose to 24.5 percent in the second quarter, from 23.8 percent earlier this year, according to CBRE. The Google sublease isn’t included in the second quarter figures.
In a worst-case scenario, San Francisco projects the Downtown vacancy rate could reach 35 percent to 50 percent in the next two years, assuming current market conditions continue and tenants decline to renew or sign new leases. In SoMa, office vacancies could rise to 42.7 percent.
[San Francisco Business Times] – Dana Bartholomew

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