Google to Lease Entire 300,000 SQFT 510 Townsend Building in San Francisco

San Francisco, SoMA, Google, Stripe, Ascendas Real Estate Investment Trust, Alexandria Real Estate, TMG Partners, Newmark
510 Townsend Street | Image courtesy of STUDIOS Architecture

By Vladimir Bosanac

San Francisco’s leasing environment was in need of some good news, and Mountain View-based search and technology giant Google has delivered what is the largest lease in the city since the global COVID-19 pandemic began. The company will be leasing 300,000 square feet at 510 Townsend in San Francisco’s SoMa neighborhood in a building that was the global headquarters of payment processing company Stripe. The property had been listed for sublease since October of 2020.

The San Francisco Business Times first reported the lease news.

The property is owned by Ascendas Real Estate Investment Trust, which purchased the building in November of 2020 along with 505 Brannan Street for $560.2 million. The seller was a joint venture between Alexandria Real Estate and TMG Partners, which also developed the properties in 2017 and leased them to Stripe and Pinterest. At the time of the acquisition, Stripe had 7 years remaining on its lease, expiring in 2027, according to previous reporting by The Registry.

510 Townsend is a LEED Platinum-certified, Class A property with a HVAC13 system, providing a safe and healthy environment for employees, which is advantageous in a post-COVID 19 era, according to Ascentis. The seven-story property also features 50 parking spaces an attractive brick façade, expansive floor plates, high ceiling heights as well as a roof deck with a large urban garden.

The SoMa neighborhood, while seen as one of the most robust ones in the city previous to the pandemic, is seeing the highest vacancy in the city at 21.2 percent, according to a recent, first quarter of 2022 Newmark San Francisco Office Market Report. With all the sublease space hitting the market over the lasts couple of years, total availability in the city’s second largest submarket has reached 32.4 percent. Until this lease, SAP was the only other company to commit to a sizable amount of space in this submarket. The technology firm subleased 28,099 square feet at 135 Townsend, according to Newmark.

Companies have struggled to get employees to return to the physical work environment across the region, and in San Francisco especially this trend has affected the commercial real estate industry. Availability increased slightly during the first quarter of 2022 to 22.2 million square feet, according to Newmark. Year-over-year Class A average asking rates increased slightly by 0.3 percent to $84.01 per square foot, while overall asking rates decreased by 0.1 percent to $78.39 per square foot. This is a result of continuous flight to quality, where companies have driven demand for best available Class A space, making it difficult for commodity space to find interest.

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