By Meghan Hall
San Francisco’s South of Market neighborhood is one of its most popular for growing companies, given its proximity to BART, the Embarcadero and the South Financial District, which is bursting with major companies such as Facebook and Slack. Reddit, a popular social media website, has inked an 83,255 square foot lease at 1455 Market Street, according to a third quarter report released by brokerage firm Newmark Knight Frank, occurring during a period of constrained leasing activity, where big blocks of new space are difficult for firms to come by.
1455 Market is owned by Hudson Pacific Properties, and is a Class A, 23-story office tower that features more than one million square feet of space. According to Hudson Pacific’s website, the tower is also home to the headquarters for both Uber and Square. The building’s floorplates are almost 90,000 square feet at podium level, and 24,000 square feet within the tower itself. Amenities include a complementary conference facility, newly renovated lobby, retail promenade with retailers such as Kagaway-ya and Mateo’s Taqueria and a 350-spot subterranean parking garage. Other nearby companies include Twitter, Yammer and Dolby.
The property also boasts a walk score of 98/100 and a transit score of 100, due to its proximity to not just the regional train system, but to MUNI, as well.
According to Newmark Knight Frank, vacancy dropped to 2.8 percent and overall availability dropped to 7.8 percent. Office requirements for tenants looking for office space in the city currently totals 7.6 million square feet, continuing to outpace supply. Of the 3.3 million square feet of office space currently under construction, 84 percent has been pre-leased or is rumored to be leased, NKF states. New product is not expected to come online until 2022 or even 2023, and will continue to push asking rates, which increased 8.9 percent year-over-year to $82.23 per square foot. Class A asking rates increased by even more to $91.22 per square foot.
In SOMA, where 1455 Market is located, the vacancy rate is slightly higher, at three percent, and inventory in the district totals 18,445,360 square feet. Class A asking rates are at $90.21 per square foot.
Other major leases secured during the quarter include both WPP/AKQA and TPG Capital, who both renewed and expanded their expected leases at 360 Third and 345 California Street, respectively. WPP/AKQA’s lease now covers 115,000 square feet, while TPG’s includes 153,288 square feet. IDEO also took 88,000 square feet of new space at 2525 16th Street, located in Showplace Square.