Both sides of the Okcoin point to corporate relocation from San Francisco that offers a sign of confidence in San Jose’s struggling office market.
The cryptocurrency exchange has leased just under 35,000 square feet of office space in Downtown San Jose, the area’s largest such deal in almost three years. Okcoin signed a seven-year lease on two separate-but-connected floors at 160 West Santa Clara Street, spokesperson Larissa Bundziak told The Real Deal.
The deal, signed last month, spans the Class A building’s 12th and 14th floors, said Cushman & Wakefield’s Brandon Bain, who marketed the space for lease with brokers Jeff Cushman and Alex Lagemann.
While Okcoin’s LinkedIn page says its U.S. headquarters is on the 13th floor of 388 Market Street in San Francisco, that office is available for lease, according to CBRE’s website. It was formerly occupied by a now-closed shared workplace provider, CBRE’s Meade Boutwell, one of the building’s listing brokers, told The Real Deal.
While Boutwell declined to disclose the provider’s name, Google search results indicate that its last tenant was Raven Office Centers. Bundziak didn’t respond to a question on the status of Okcoin’s San Francisco office.
Savills’ Mike Mordaunt, Chris Errecart and Janet Kuang represented Okcoin in its San Jose lease. Mordaunt declined a request for comment.
Founded in 2013, Okcoin allows people and companies to exchange their paper money for cryptocurrencies such as Bitcoin and Ether and trade more than 50 types of digital assets through its platform. Besides the Bay Area, the company has offices in Miami, Malta, Hong Kong, Singapore and Japan, according to its website. It employs more than 300 people and says it has more than 1 million customers in 192 countries and territories.
A business with Okcoin’s customer base choosing to open an office in Downtown San Jose will probably raise some eyebrows, as will the size of its lease. The area’s largest new office lease in the past three years was data storage specialist Cohesity’s 60,200-square-foot deal for three floors at 333 West San Carlos Street in the second quarter of 2019, according to Cushman & Wakefield data.
Downtown San Jose’s office vacancy rate was just under 13 percent when Cohesity signed its lease, and it has jumped to 19.4 percent since. Meanwhile, the amount of office property available for sublease almost tripled to about 228,000 square feet at the end of last quarter, Cushman data show.
Ironically, Cohesity has contributed to that rise: The company is trying to sublet the three floors it agreed to rent in 2019, Julie Leiker, Cushman’s Silicon Valley research director, told The Real Deal.
The increase in vacancies can also be partially attributed to CityView Plaza, a block-sized business park in the city’s core, being almost empty. Owner Jay Paul Company spent the past few years relocating tenants from the property as part of its plan to raze it and build a 3.8-million-square-foot Class A office complex there.
The amount of new office space already being built downtown totaled almost 2.1 million square feet at the end of last quarter, more than double the amount at this time three years ago, according to Cushman.
Okcoin, meantime, will receive up to five months of free rent and an $85 per-square-foot tenant improvement allowance as part of its San Jose lease, Bundziak said. It’s paying $5.10 a square foot a month at the start of its term, in line with downtown’s average Class A office asking rent of $5.13 a square foot, according to Bundziak and Cushman data.
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