Dropbox to Shave 165K sf Off SF Mission Bay Headquarters

Dropbox will fork out $79 million to end its lease for part of its San Francisco headquarters.

The file-hosting tech firm will terminate its lease for 165,000 square feet at The Exchange at 1800 Owens Street in Mission Bay, the San Francisco Business Times reported, citing a regulatory filing.

The move comes after Dropbox paid nearly $32 million in 2021 to terminate 134,000 square feet of offices it had subleased to Vir Biotechnology.

Dropbox once leased the entire 738,000-square-foot Exchange. Its latest downsizing will leave its corporate hub with 439,000 square feet in a shift to remote work initially launched by tech firms.

The upcoming termination with building owner KKR, based in New York, will be done in three phases, according to the Business Times.

This quarter, it’ll whittle down its offices by 52,000 square feet, while paying $28.1 million in termination fees. Early next year, it’ll shave off 54,000 square feet more, paying $14.9 million. In early 2025, it’ll complete the downsizing with a final 59,000 square feet, costing $36 million.

In September 2021, Dropbox put 400,000 square feet of office space in the property up for sublease. The firm had previously told the San Francisco Times that it was planning to retain just 90,000 square feet in the building.

KKR bought the four-building Exchange for just over $1 billion in March 2021. The deal with Kilroy Realty marked the second-highest price ever paid for a single property in San Francisco.

The private equity firm this month sold 50 industrial properties in major markets including Chicago, Dallas-Fort Worth and Atlanta for a combined $560 million.

— Dana Bartholomew