Dropbox paid $32 million to terminate part of its lease at its San Francisco headquarters, months after the firm made clear it was looking to shed most of its space in the building.
The online file-sharing company agreed to a lease amendment with landlord KKR on Dec. 16, according to paperwork filed with the Securities and Exchange Commission. The firm’s lease at the property, located at 1800 Owens Street, totals 750,000 square feet. The amount of space covered in the termination was undisclosed, but Dropbox said that the square footage covered in the agreement was previously under a sublease. The firm’s deal with its unidentified subtenant was also terminated on Dec. 17, the company said in its announcement.
“We believe this lease termination will generate long-term financial gain and is overall an efficient use of our capital,” a Dropbox representative told The Real Deal.
Dropbox had previously closed two sublease deals at the property. Vir Biotechnology signed a 134,000-square foot sublease in the building in December of last year. Months later, BridgeBio took another 53,000 square feet of sublease space in the property.
In September, Dropbox put 400,000 square feet of office space in the property up for sublease. The firm, which has a 15-year lease term at the property, reportedly targeted life science firms. The sublease space that was marketed at the time was expected to become available in the fourth quarter of 2022.
The firm previously told the San Francisco Times that it was planning to retain just 90,000 square feet in the building. The firm planned to use the space for its San Francisco Studio, a meeting space for its employees in the region.
KKR bought the four-building campus, also known as The Exchange, for just over $1 billion last March. The purchase price is the second-highest for a single property in the city’s history. KKR declined to comment on the lease termination.