Rippling has inked a lease for a 123,000-square-foot headquarters in Downtown San Francisco, quadrupling its current footprint.
The locally based workplace management software firm will move into nine floors at the former Union Bank building at 430 California Street, the San Francisco Chronicle reported. Terms of the lease were not disclosed.
The company will move from its headquarters at 55 Second Street, where it leases 30,000 square feet across two floors.
The deal is the second-largest lease of the year in San Francisco, after Adyen, a Dutch payment firm, subleased 150,000 square feet last month at 505 Brannan Street.
Beverly Hills-based Kennedy Wilson and Takenaka, based in Japan, bought the 21-story, 247,000-square-foot tower at 430 California and the 27,300-square-foot former Bank of California building next door at 400 California in 2016 for $135 million, or $475 per square foot.
Rippling will occupy offices once leased by WeWork, the New York-based coworking firm that turned it into “flashy modern offices,” according to the Chronicle. Last fall, the building’s landlords sued the bankrupt firm for $250 million in unpaid rent, future rent and other costs.
Coinbase, a cryptocurrency exchange, later subleased it from WeWork, then folded up its San Francisco headquarters during the pandemic for remote work.
By contrast, Rippling demands its employees report to the office three days a week. Its San Francisco employees number 500, making its current headquarters far too small.
“We were very clear since the beginning of the pandemic that we would have a strong in-office culture,” Matt MacInnis, Rippling’s chief operating officer, told the Chronicle. “We’ve never wavered from it.”
MacInnis said easy access to public transit and the high quality of its new headquarters building made 430 California Street attractive.
“We’re competing for a pool of people who want in-office jobs,” he added. “We need to have a space that’s going to have a modicum of ‘wow’ factor.”
With a record 36.7 percent office vacancy across San Francisco, according to revised figures from CBRE, Rippling had the field to choose from. Instead, it opted for the competitive sector of trophy offices.
But MacInnis said its top-quality floors that Rippling leased from Kennedy Wilson and Takenaka weren’t deeply discounted, though he declined to disclose the price.
Property owners and brokers have cited a “flight to quality,” in which the premium office market is performing well, while older offices have emptied out.
“The top third is still very competitive. Landlords are holding out for high rents,” MacInnis told the newspaper. “You have to fight for it.”
— Dana Bartholomew
