The diminishing tech presence in San Francisco shrunk further with the closure by Snapchat of its 33,000-square-foot office in South of Market.
Santa Monica-based Snap, the parent company of Snapchat, no longer has an office presence in San Francisco, Insider reported.
As part of a recent restructuring that shed at least 1,200 full-time jobs, Snap decided to close its office at 875 Howard Street, an unidentified source familiar with the decision said.
Snap’s SoMa lease wasn’t due to end until November 2024, according to another person familiar with the exit. The owner of the 287,000-square-foot building is Hudson Pacific Properties, based in Los Angeles.
Both sources asked Insider not to be identified discussing private matters.
An unspecified “lease exit” was part of $155 million in costs related to Snap’s reorganization, according to a footnote to its third-quarter regulatory filing.
The San Francisco office “was used consistently by only a handful of team members following our move to flexible work” and they are now offered access to “a co-working space in the city,” a Snap spokesperson told Insider.
He also pointed to the company’s “flexible work policy” and said an office in nearby Palo Alto is open.
Snap opened the 33,000-square-foot San Francisco office in 2017, shortly after the company went public that year. It provided office space for more than 200 workers, mainly engineers.
The closure is another blow to San Francisco, formerly a mecca for tech workers and glitzy offices.
With an exodus of tech employers in the era of remote work, the city’s office vacancy climbed to a record 25.5 percent last month, according to CBRE Group, as employers such as Salesforce and Twitter ditched their office leases.
The city’s Downtown faces 1,300 expiring office leases by 2024. Tech tenants account for the lion’s share of the lapsing deals.
Social media platforms seem to have more permanently embraced a remote work culture. Facebook, which last year changed its name to Meta, no longer requires set days in the office. Twitter was the first to announce a permanent remote work policy.
In San Francisco, return-to-office rates have stuck at 40 percent of pre-pandemic levels, according to security firm Kastle Systems. Tech-oriented jobs at such companies as Salesforce, Uber Technologies, Google and Meta Platforms make up 10 percent of all employment, according to Moody’s Analytics.
With many employees working remotely, their former offices remain empty. San Francisco Mayor London Breed fears the lost tech workers may be gone for good, and is looking to replace them with green tech and biotech firms.
The city is still listed on Snap’s website as one of its office locations, alongside two dozen other cities including nearby Mountain View. The company’s Santa Monica headquarters has more than 400,000 square feet of office space.
The software company added 510,000 square feet of leased office space worldwide over the last two years, ending 2021 with 1.4 million square feet, according to a TRD analysis of public financial filings.
But last month it announced it would lay off one in five workers, raising the question of how much office space it will need going forward.
Snap founder and CEO Evan Spiegel said at a recent conference in Los Angeles that being able to work from home “profoundly changed my life.”
“It was much harder before the pandemic, because I really rarely saw our kids,” Spiegel said.
— Dana Bartholomew
Read more
Commercial
San Francisco
Downtown SF faces 1,300 expiring office leases by 2024
Commercial
San Francisco
SF mayor looks to life sciences to fill tech office void