Hudson Pacific Scores San Francisco Record-Setting Lease

San Francisco just notched its largest office lease in nearly a decade, marking the latest sign of a post-pandemic comeback for the city’s recovering commercial market.

The City and County of San Francisco inked a 502,000-square-foot lease expansion at 1455 Market Street, bringing the city government’s total presence there to more than 900,000 square feet, the San Francisco Business Times reported. The deal with landlord Hudson Pacific Properties has a 23-year term and represents the largest office lease in the city since 2018 and tops other large leases in recent years, such as OpenAI’s 486,000-square-foot lease in Mission Bay in 2023.

As it stands, the city government already occupies approximately 400,000 square feet in the building across two lease deals signed in 2024 and 2025. With the city’s new agreement, occupancy in the nearly 1.1-million-square-foot building rises to 89 percent. A few years ago, the building was less than half-occupied, according to the Business Times.

The lease deal includes two five-year extension options and a possibility for the city to own the building outright. The city government has the right to purchase the 22-story building until next March; after that, the city will still maintain the right of first offer throughout the rest of its lease.

With the new lease, several city departments will consolidate into one building, “mov[ing] out of an aging, costly and seismically vulnerable building” into a modern facility, Angela Yip, a spokesperson for the city’s real estate division, told the Business Times. The Municipal Transportation Authority, Human Services Agency and the City Administrator will move into 1455 Market starting in the fall of next year.

In doing so, the government will effectively abandon the 650,000-square-foot city-owned building across the street at 1 South Van Ness Avenue. The city plans to use the Van Ness property, zoned for residential and mixed-use purposes, to “create more housing and catalyze development” in the Mid-Market corridor, Yip said.

Hudson Pacific dolled out $93 million for the 1455 Market Street building in 2010. In 2024, Hudson Pacific bought its joint venture partner’s interest in the building for $43.5 million. At the time, the deal valued the property at about $96.6 million — a roughly 80 percent tumble from its 2015 value of nearly $219.2 million.

— Chris Malone Méndez