Google’s cloud computing division has sublet a 300,000 square foot office building in San Francisco that once served as the headquarters of financial technology company Stripe.
The Mountain View-based tech giant has sublet the seven-story building at 510 Townsend Street, adjacent to the terminus of Highway 280 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 until 2027. The fintech company paid $72 per square foot when it moved in 2015. Stripe 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 came from Wells Fargo, which renewed a lease for 622,300 square feet last month in the Financial District.
The building at 510 Townsend was co-owned by Pasadena-based Alexandria Real Estate Equities and San Francisco-based TMG Partners when Stripe listed it for sublease in 2020.
Ascendas, a unit of Singaporean investor Capital, bought it a month later for $572 million along with another building leased from Pinterest at 505 Brannan Street.
Google Cloud’s sublease in SoMa is a boon for a turbulent office market in San Francisco.
The office vacancy rate fell from 23.8% earlier this year to 24.5%, according to CBRE. The google sublease is not included in the second quarter figures.
In a worst-case scenario, San Francisco projects the downtown vacancy rate could reach 35% to 50% over the next two years, assuming current market conditions continue and tenants refuse to renew or to sign new leases. In SoMa, the number of vacancies could reach 42.7%.
[San Francisco Business Times] –Dana Bartholomew