The office building at 140 New Montgomery Street has signed new tenants for nearly 56,000 square feet over the last nine months, and gotten a renewal from Bloomberg, the building’s largest tenant, according to a press release from CBRE, the brokerage that represents owner Pembroke, and a Pembroke rep.
The new tenants are appointment scheduling software company Calendly, executive recruiter Heidrick & Struggles and startup studio super{set}, which all signed direct leases between 8,000 and 26,000 square feet, according to the Pembroke rep. Calendly is a remote-first company that will use the space when the team comes together, according to the release.
While Boston-based Pembroke and CBRE wouldn’t reveal contractual rates, asking rents in the 26-story tower for low-rise space is in the mid-$70s per square foot, while high-view floors range from the high $90s to low $120s.
CBRE’s Bill Cumbelich, Dean McPadden and Jack Beritzhoff represented Pembroke in the deals, and CBRE’s Phil Tippet represented Bloomberg while Beritzhoff represented Heidrick & Struggles. Savills’ Michael McCandless and Denis Karas represented super{set}; JLL’s Hugh Scott, Derek Johnson and Jack Nelson represented Calendly.
The terms range from 10-plus years to less than five years, though Pembroke didn’t specify which tenant signed for which term. Two of the new tenants have moved in and one is still under construction.
Turnkey construction management with Pembroke’s onsite project manager was one of the attractions for the nearly 300,000-square-foot Art Deco building, Pembroke said, which was renovated inside and out recently and includes a private courtyard, onsite fine dining Moroccan restaurant Mourad, a locker rooms with showers and bike storage with a tune-up station.
Bloomberg is the biggest tenant in the building and did not downsize as part of the renewal, according to Pembroke, who would not comment on any concessions or other details related to the lease. The business news and data company has operated its West Coast Technology Hub from the 22nd and 23rd floors of 140 New Montgomery since 2015. The R&D office has a stingray tank, event space, dedicated quiet room and a data visualization art piece, according to a video tour Bloomberg produced of the space when it first moved in.
With the renewal and the new leases, the building is now 82 percent occupied, according to CBRE. The building’s website shows that floors five through eight are currently vacant, with floor plates at about 12,500 square feet. There’s also about 4,400 square feet available on the ninth floor. Since 2021, CBRE has completed 15 deals across 18 floors, or almost 200,000 square feet in signed deals, according to the brokerage.
The building, which was built as the headquarters of Pacific Telephone and Telegraph in 1925, has outperformed the rest of the office market over the last four years, said Bill Cumbelich, executive vice president at CBRE. Its architecture, location next door to SFMOMA and walking distance to Transbay Park and Yerba Buena Center, plus its amenities are key draws.
“It will take time for the San Francisco office market to rebalance its supply and demand, but creating a vibrant office environment with thoughtful amenities will provide a quality experience for today’s tenants in the market,” he said in a statement.
The new tenants emphasized the need for collaboration and team building and the resilience of San Francisco and their continued commitment to the city as reasons for signing the new leases in the press release.
“As our employees shake off the doldrums of the pandemic and we double down on our commitment to building successful startups centered on data and AI, 140 New Montgomery provides a superb environment for deep collaboration, knowledge sharing and community engagement,” said Tom Chavez, founding general partner at super{set}.
AI companies like super{set} made up more than one quarter of total leasing activity in San Francisco in 2023 and continue to be a significant source of demand in 2024, according to CBRE. There were 6 million square feet of tenant requirements in the city in the first quarter of 2024, up from 4.2 million square feet in the fourth quarter of 2023 and 3.4 million square feet in the first quarter of 2023, according to the brokerage.
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