Salesforce drops 350,000 SF in the SF desktop market

Left to right: Salesforce co-CEOs Bret Taylor and Marc Benioff with Salesforce West at 50 Fremont Street (Salesforce, Dead.rabbit, CC BY-SA 4.0/via Wikimedia Commons, iStock)

Salesforce, San Francisco’s largest employer, is cutting 350,000 square feet of office space by leasing more than a third of its 43-story tower in the Financial District.

The tech giant leases 40% of its Salesforce West building at 50 Fremont St., the San Francisco Chronicle reported, citing data from CoStar. This is his third job cut since the pandemic.

This reduction indicates a drop in demand for office workspaces in the age of remote work. The city’s office vacancy rate has quadrupled to over 21% since 2020.

The Salesforce roster ranks among the largest office craters in the city, with room for around 1,750 workers. The company said it would retain the building and reoccupy the space as needed.

“Salesforce desktops are an important part of our culture, and the way we use them has evolved. We sublet floors in Salesforce West to make the most of our real estate footprint,” the company said in a statement.

The company bought 50 Fremont St. in 2015 for $638 million, before the Salesforce Tower was built across the street. It employs 10,000 workers in the city, who have been allowed to work from home permanently for part of the week.

Last year, he sublet the Salesforce East tower space at 350 Mission St. to Yelp and Sephora, showing the demand for high-quality, centrally located offices. At the same time, he canceled his 325,000 square foot lease at the unbuilt Parcel F tower.

Slack, the messaging company now owned by Salesforce, has listed 200,000 square feet under sublease near 45 Fremont, the San Francisco Business Times communicated in February.

Salesforce continues to expand into other cities, with plans for Salesforce Towers in Chicago, Dublin, Sydney and Tokyo over the next two years. The tech industry is now expanding outside the Bay Area, where real estate costs and wages are lower.

The company said it was hiring more selectively as challenges such as inflation and fears of a recession cloud the economic outlook.

Major tech companies have reduced or closed offices in San Francisco during the pandemic, including Coinbase, Pinterest, Block, Taskrabbit and PayPal.

Of the 14 companies and businesses that have scaled back or disclosed plans this year to shrink their Bay Area office footprints by at least 50,000 square feet, 10 are looking to do so in San Francisco.

San Francisco-based companies, or those with offices in the city, have freed up or plan to vacate nearly 1.8 million square feet of space, according to The real dealthe research.

That’s nearly three-quarters of the roughly 2.5 million square feet of property in the Bay Area that businesses have either abandoned or announced plans to abandon this year.

[San Francisco Chronicle] – Dana Barthelemy

Jose C. Birney