Square is putting part of its San Francisco headquarters space on the market, joining a growing number of technology companies subleasing offices in the city after planning for future expansion.
Square, the mobile-payments company co-founded by Twitter Chairman Jack Dorsey, is offering for sublease 50,000 square feet on two floors at 1455 Market St., according to brokerage Savills Studley. In the same building, Rocket Fuel put 50,000 square feet on the market this year.
San Francisco, where the technology industry has dominated office demand and sent rents soaring, leads the U.S. in sublease space as a percentage of total vacancies, according to Cushman & Wakefield. The share jumped to 13.5 percent in the first quarter, the highest since the financial crisis, from 9 percent a year ago. While the city’s commercial real estate market is among the nation’s strongest, subletting can be an indicator of companies getting too ambitious about their growth prospects.
Companies such as Square leased more space than they needed to ensure they have offices to grow into in a few years, said Matt Hart, senior managing director for Savills Studley. Because Square signed the lease when the market was less expensive, the company can rent its excess space for more than it’s paying...S.F. office subleases climb
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National Office Sector Report (Q4 2014)