By Meghan Hall
Communication software firm Slack has decided that the future of work is not necessarily in the office and has placed 208,460 square feet of space on the sublease market in San Francisco. First reported by the San Francisco Business Times, the space is within the Bechtel Building, located at 45 Fremont Street.
Slack originally leased space in the 600,000 square foot building in 2019 as it originally prepared to go public. However, after COVID-19 hit and a subsequent acquisition by industry giant Salesforce in July of 2021 for $27.7 billion, Slack has changed its plans.
Prior to the COVID-19 pandemic, assets such as 45 Fremont were popular with major companies. Located in the South Financial District, the building features easy access to BART, MUNI, and major freeways. The building–originally constructed in 1978–features 18,000 square foot floor plates and proximity to “excellent” dining and retail options, according to its website.
“When I see headlines about CEOs trying to lure employees back to the office, I feel like it’s probably a doomed approach,” explained Slack CEO and Co-Founder Stewart Butterfield to The Washington Post in December. “Work is no longer a place you go. It’s something you do.”
Butterfield noted that Slack still holds a “huge” amount of real estate, but that its needs are changing. Slack’s current headquarters, at 500 Howard, has a capacity for around 1,000 people but only sees about 30 employees on any given day. Slack says that for new remote hires and for those who have moved away from offices, it will not ask employees to return and will continue to implement a “digital first” workplace strategy.
Slack is not the only company taking this approach. Autodesk has given up 117,000 square feet at 300 Mission, while Dropbox recently paid a $32 million termination fee to end its lease at The Exchange at 1800 Owens street. Dropbox had 11 years left on its lease.
At the end of the fourth quarter, the amount of sublease space on the market remained elevated, according to reports by The Axiant Group. At the end of the year, 5.5 million square feet of sublease space remained on the market, and the overall vacancy rate–including sublease and direct space–totaled 20.3 percent.