While the uneven return-to-work policies play themselves out across the commercial real estate industry, one company has made a call on how it will grow in the future. Splunk, the data platform for the hybrid world, as the company describes itself on its website, will not require any of its employees to return to a physical office in the future, and as a result, the company has decided to significantly scale down its footprint in its hometown San Francisco.
According to a report by the San Francisco Business Times, Splunk has placed on the leasing market the building where it was headquartered in the city’s SoMa neighborhood located at 270 Brannan Street. The 182,262 rentable square feet can now be leased on a direct basis, adding to a growing number of available spaces across the city. While the company will maintain its headquarters in San Francisco, it will only be concentrated in a 100,000 square foot space leased at Kilroy Realty’s 250 Brannan Street, next door.
“San Francisco remains Splunk’s headquarters. We are consolidating our operations to a newly renovated office space at 250 Brannan, where Splunk began,” Splunk’s spokesperson said in an email referenced in the story.
The company’s exit from San Francisco began several years ago as Splunk looked at ways to tap into a deeper talent pool across the region. According to previous reporting by The Registry, Splunk took the full building in San Jose in 2015 at 500 Santana Row. The 234,000 square foot property was a spec project at the time developed by Federal Realty.
In 2018, Federal Realty announced that the company was expanding again at Santana Row, this time leasing 301,000 square feet of office area in the Trust’s 700 Santana Row, a 319,000 square foot, Class-A mixed-use office and retail building.
The lease Splunk signed in San Francisco at 270 Brannan was announced in August of 2014 shortly after developer SKS Partners and joint venture partner Mitsui Fudosan America broke ground on the project.
270 Brannan is located in the heart of San Francisco’s SoMa neighborhood., and it is designed by Pfau Long Architects, according to the building’s website. A flexible, open floor plan caters to the high-tech companies that now populate the area, while an emphasis on natural light and landscaping appeals to the modern aesthetics of those who work there, the website explains.
SoMa represents approximately 11.2 million square feet of Class A office space, out of a total of 60 million square feet in San Francisco, according to a recent, first quarter of 2022 market research report by brokerage firm Newmark. It is the only neighborhood in the city that has any commercial office construction activity at the moment. An additional 908,624 square feet is under development there, which will be added to the city’s office inventory in the near future. Total vacancy in SoMa is the second highest at 19.9 percent (the highest is in the North Waterfront/Jackson Square neighborhood, which sits at 25.4 percent). SoMa also holds the second-highest availability rate of 32.1 percent (North Waterfront/Jackson Square tops it at 34.7 percent), which is not an enviable distinction for the neighborhood.
On the positive side, the property at 270 Brannan is fairly ready as a plug-and-play location and it is not very large, which may help it get leased faster.