Lyft has renewed its lease for its San Francisco headquarters, signing on to another decade in a space that’s less than half the size of its original hub as the company adjusts to pandemic-era changes.
The ride-hailing giant announced that it had signed a “long-term extension for our San Francisco office to align with our current occupancy needs,” a deal totaling about 170,000 square feet at 185 Berry St. in the city’s China Basin neighborhood.
The growing startup moved into spacious new offices at the waterfront complex in 2016, according to CoStar data. But the firm began shedding space in its then 420,000 square-foot offices in 2022, after most of its employees shifted to remote work during the COVID-19 pandemic, putting up around half of its space in San Francisco for sublease in addition to shrinking its footprints in Seattle, New York City and Nashville, Tennessee.
The downsizing followed Lyft’s announcement in early 2022 that it was adopting a “fully flexible workplace,” allowing thousands of corporate employees the option to work from home on an indefinite basis.
With San Francisco companies leading the charge to embrace newly flexible workplaces, tech firms such as Salesforce, Yelp, Dropbox, Zillow, Amazon and Facebook parent Meta shrunk their real estate footprints, causing a chain reaction that rippled across the national office market, raising sublet availability to record highs in some cities and sending San Francisco’s commercial real estate market — and its economy — into a sustained tailspin.
The pendulum on remote work is starting to swing the other way. Tech giants like Amazon and Salesforce have reversed course in recent months and stepped up their in-person requirements, decreeing that workers report to the office as many as five days a week.
Signs of a turnaround
A new CEO, David Risher, took the helm at Lyft in 2023 and reversed the firm’s flexible remote-work policy and laid off more than a thousand workers.
Earlier in 2024, the firm reported its first profitable quarter, and it remains one of the most prominent tenants at 185 Berry St., a property that consists of about 900,000 square feet across two buildings.
In a statement to CoStar News, Risher framed the company’s renewal of its lease as a renewed commitment to the city and its economic well-being.
“Lyft and San Francisco go together like a La Taqueria burrito and guac,” he said. “We’re excited to play a role in connecting locals alike to the best San Francisco has to offer and powering its economy for years to come.”
San Francisco’s battered office market is finally showing signs of recovery, according to CoStar. Fourth-quarter leasing volume in San Francisco’s office market is on course to hit its highest total since the onset of the COVID-19 pandemic in 2020, largely thanks to the rapid growth of the artificial intelligence sector that has attracted billions of dollars in funding.
Companies have shown a strong preference to be in San Francisco, which offers unmatched access to talent and tech infrastructure, according to Nigel Hughes, senior director of market analytics for the San Francisco Bay Area at CoStar Group.
“The worst seems to be over,” wrote Hughes.