The downtown San Francisco high-rise 181 Fremont St. has become a desired location for tech companies.
Yalonda M. James/The Chronicle
Amazon is preparing to clear out a 130,000-square-foot office in the heart of San Francisco’s Financial District, leaving more than half a dozen floors at 188 Spear St. empty.
A company representative confirmed to the Chronicle on Monday that Amazon is considering closing its 188 Spear office, one of its three main locations in the city, as its long-term lease in the building is due to expire early next year.
Yet, just three blocks away, the 181 Fremont tower hums with startups, artificial intelligence firms and new tenants snapping up space that was abandoned after Meta fled.
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The juxtaposition unfolding at these two office towers captures the challenges and surprises currently shaping the city’s office recovery. After years of historic vacancy — with overall office availability hovering above 30% and sublease space swelling in the post‑pandemic era — there have been recent signs of leasing momentum not seen since before 2019.
Despite that, some of the major companies in the city, including Dropbox, and continue to relinquish long-held offices, adding even more available space to an already saturated market.
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The Amazon office, which is internally referred to as “SFO13,” spans more than half of the 12-story tower, and was made available for direct leasing on Friday — about 10 months before Amazon’s 2012-era contract is up, according to a listing viewed by the Chronicle.
Amazon is leaving its office space at 188 Spear St., a 15-story downtown San Francsico tower.
Google Street View
“We regularly evaluate our corporate office space to ensure we’re best serving our business, employees and customers,” said Amazon spokesperson Steve Kelly in a statement to the Chronicle. “The lease at our SF013 offices expires early next year, and we’re evaluating our options while prioritizing bringing teams closer together and making it easier to collaborate across different parts of the business.”
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Kelly declined to comment on whether Amazon exiting the 1970’s-era Spear Street tower means a potential consolidation of its teams at one of the company’s other current offices in the city: 525 Market St. and 660 3rd St.
What is certain is that the listing means that the 188 Spear tower could soon be close to vacant. At the end of 2023, software analytics firm New Relic, the building’s second-largest tenant, sought a subtenant for roughly half of the four floors it has long occupied at 188 Spear. According to Costar, which provides commercial real estate data, the company’s entire, 55,000-square-foot office is currently being marketed for direct leasing.
New Relic did not respond to an inquiry about the listing from the Chronicle, while building owner Shorenstein Properties declined to comment on Amazon and New Relic’s listings and its efforts to bring in new tenants. The building features a Chase Bank branch on its ground floor, which remains open.
Just blocks away, 181 Fremont — a slender, glass-clad 57-story tower completed in 2018 with roughly 435,000 square feet of offices below luxury condominiums — stands in stark contrast, emerging as a bright spot in downtown’s recovery. The high-rise, which connects to Salesforce Park via a skybridge, only has a few floors left that are available for leasing — a formidable turnaround given that its entire office component was languishing on the sublease market less than three years ago.
Before construction wrapped up on the tower in 2018, Facebook, now known as Meta Platforms, fully leased its office portion, in a long term deal that expires in 2031 and at the time symbolized the peak of Big Tech’s long-term bet on San Francisco as a hub for growth and talent.
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The tower made headlines again at the start of 2023, when its prominent anchor tenant dumped all of that space on the sublease market, joining the list of major companies in the city that embraced remote work in the midst of the pandemic.
Downtown’s vacancy rose to a historic high of more than 35% in the years since, but Meta’s space did not sit unused for long. By late 2023, the building became the target for a patchwork of smaller leases from subtenants, starting with travel tech company Navan, which signed on to take about 36,000 square feet in the building that October. Its tenant roster began to slowly rebuild when companies like Zendesk and Strava followed, each taking about 40,000 square-foot offices across multiple floors.
Last year, artificial intelligence startup Mercor signed on for three upper floors in the building for its headquarters after raising a $350 million funding round, signaling a continued shift from a single Big Tech occupant at 181 Fremont to a more fragmented, next-generation tenant base — specifically AI companies. The company is reported to be in talks for additional space in the building, though the pending deal has yet to close. Mercor did not respond to an inquiry from the Chronicle seeking to confirm its real estate footprint in the building.
AI startup’s hold on Meta’s former space is growing: Cambridge-based Lila Sciences confirmed to the Chronicle that it has claimed floors 35-38 for its AI program, launching its first office in San Francisco at 181 Fremont.
And a spokesperson for Meta confirmed that the company this year sublet roughly 80,000 square feet to Perplexity AI, one of the biggest chunks of the company’s sublease to be absorbed so far.
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While high vacancy rates continue to be a challenge for downtown’s older buildings, AI startups have been “wanting move-in ready spaces as quickly as possible,” said Robert Sammons, a senior research director with brokerage Cushman and Wakefield.
“Not only have smaller built-out subleases leased well over the past year, but so have the bigger blocks,” Sammons said, adding that there is “some nervousness” among tenants that the “best blocks — both subleases and direct space — are leasing quickly.”
With downtown’s once-dreaded, multi-million square-foot inventory of flashy tech subleases now seemingly brimming with opportunity, the question becomes whether older blocks like 188 Spear will fill up just as quickly.