In a sign that there is still life in the San Francisco leasing market, Benchling, a life science technology company took up 106,000 square feet at 680 Folsom St. in San Francisco last week, according to a statement by the firm’s representative. The space was previously leased to macys.com, which left the building in 2020 after it made a decision to relocate its digital business out of the San Francisco market.
The leased space will be across three floors, and the 106,000 square-foot lease is one of the more significant ones in San Francisco in 2021, which has recently seen sublease space skyrocket since the onset of the COVID pandemic. While the Benchling lease is a welcome sign of positive traction in the market, according to a recent, first quarter industry report by Cushman & Wakefield, San Francisco hit 18.7 percent vacancy at the end of the first quarter, registering around 8 million square feet of sublease space, which accounts for a little more than half all of the available space in the city.
680 Folsom is owned by Boston Properties, which acquired the asset in 2012 for just over $123 million. The building is 14 stories tall and has a total of 524,793 square feet with a typical floor size of 34,000 square feet. Microsoft and Riverbed Technologies are also tenants in the building. The sublease that Macy’s has on the market runs through 2028, although Benchling would not confirm any other details about the lease or the pricing that it paid on it.
Macy’s sublease was marketed by JLL, whose efforts were led by Chris Roeder, Carlye Parker and Chris Holland.
Cushman’s report sees office jobs trending higher from their pandemic lows and a further uptick is expected throughout 2021. Vacancy, however, is forecasted to remain high, which will result in further compression of asking rents throughout 2021. On the positive side, at the close of the first quarter, Cushman & Wakefield was tracking 5 million square feet of tenant demand in the market with approximately 2.9 million square feet within the technology sector. The total figure is an increase of 28.2 percent from the 3.9 million square feet at the end of the fourth quarter. This figure is also 24.2 percent below the 6.6 million square feet recorded just prior to the pandemic at mid-first quarter 2020.