As it prepares for an initial public offering on Wall Street, Uber will open another office in San Francisco.
The ride-hailing company signed a lease of 42,000 square feet at 71 Stevenson St. in South of Market. It will be the company’s smallest office in the city, with space for around 300 employees based on typical occupancy standards.
“Uber continues to grow around the world, and we’re excited to continue to invest in our hometown of San Francisco with a new lease at 71 Stevenson Street,” the company said.
The deal is a sign that Uber needs even more space beyond its under-construction Mission Bay headquarters. Uber has four office buildings set to open in early 2020 that total 1 million square feet. Two of the buildings are part of the Warriors’ Chase Center arena complex.
Uber is San Francisco’s second-largest tech tenant, with 1.7 million square feet leased or owned, behind only Salesforce, according to brokerage Cushman & Wakefield.Unlike Salesforce, which has concentrated its building in a dense campus near the Transbay Transit Center, Uber’s offices are spread across the city. Its current headquarters is 1455 Market St. in Mid-Market. It also has leases at 685 Market St. and 555 Market St., which is adjacent to 71 Stevenson St. A few miles south, Uber’s autonomous driving division has an office at Pier 70 in a renovated historic building.
Uber’s deal demonstrates that tech companies may need to spread out given the city’s lack of available space, said Robert Sammons, Northwest research director at Cushman & Wakefield. San Francisco has one of the lowest vacancy rates in the country and record-high office rents, upward of $80 per square foot annually.
“I think they are taking it where they can get it and for the time frame they need,” Sammons said. “I’m sure they’d prefer to consolidate, and that will likely happen once their campus in Mission Bay is completed.”
Makeup company Bare Escentuals previously had its headquarters at 71 Stevenson St., but in 2016 it moved to New York. Current tenants include financial services company Lending Club and children’s clothing company Gymboree, which filed for bankruptcy two weeks ago.
Uber has been an active real estate dealmaker around the Bay Area. It previously bought Uptown Station in Oakland, selling it after it abandoned plans for a major East Bay office. Payments processor Square — Uber’s neighbor at 1455 Market St. — has now leased the entire office portion of that building. Uber also has a Palo Alto office, joining a trend of tech companies that have offices in both Silicon Valley and San Francisco.
“By establishing multiple offices throughout San Francisco and the greater Bay Area, large tech firms could wade into a larger pool of potential employees,” said Jesse Gundersheim, San Francisco market economist at CoStar.