Uber Follows Other Tech Giants in Office Space Reduction, Another San Francisco Sublet

San Francisco commercial real estate took another hit as ride-sharing giant Uber looks to shed a sizeable part of its San Francisco office space. The company recently listed nearly a third of its new corporate hub in the city's Mission Bay neighborhood.

The move represents one of the latest among U.S. firms looking to reduce their space as executives shift priorities in an uncertain economy and the rise of hybrid work patterns stemming from the pandemic.

Photo by Lili Popper on Unsplash

Uber attempts to sublease all 286,548 square feet in one of four buildings it uses for its global headquarters, according to marketing materials shared with CoStar News. The task to sublease won’t be easy considering the declining number of office tenants willing to invest in and expand in the city, which has one of the highest office vacancy rates in the country, CoStar data shows.

San Francisco rents, which rank among the highest in the nation, now average about $62 per square foot, CoStar data shows.

 Many Silicon Valley tech giants continue to make deep cuts to their real estate portfolios by closing office locations, subleasing unwanted space, terminating prelease agreements, and halting future investments. Those decisions have increased the Bay Area's real estate market with millions of square feet of sublease space or have downsized offices as leases come due.

 San Francisco now touts one of the highest sublease availability rates in the country.

Nearly 12 million square feet of sublease space remains available in San Francisco alone — more than six percent of the city's entire inventory — well below New York, which has about 31 million square feet of sublease space, or about three percent of its entire office stock, according to CoStar data. The issue continues to worsen as the demand for office space in and around the city's downtown deteriorates, where vacancy has shot up to surpass 20%, the data shows.