San Francisco's office market has struggled to rebuild the momentum it lost to the pandemic. But one tech company's decision to buck the industry's widespread real estate downsizing was a much-needed boost of optimism for the beleaguered Bay Area city.
Against a backdrop of major sublease listings and lease terminations, software company Sigma Computing not only renewed, but expanded its office lease in downtown San Francisco to signal its long-term commitment to physical space.
The deal, which expanded the company's footprint to about 86,000 square feet, was the largest single technology deal in the city for 2022, a feat that garnered it a 2023 CoStar Impact Award as lease of the year in San Francisco, as judged by a panel of real estate professionals familiar with the market.
The expanded lease at 116 New Montgomery means Sigma now occupies more than half of the nine-story office building, space in which the tech company will be able to reinforce its in-person work culture with features such as collaboration centers, weekly rooftop meetings and dog-friendly spaces. What's more, the neighborhood — which was flooded with startups and tech workers prior to the pandemic — has been especially hard hit as many of those tenants have decided to downsize or forgo their office spaces altogether.
San Francisco's real estate market is known for its aggressive boom and bust cycles, but in a period of mounting uncertainty, Sigma's lease with landlord Jamestown confirms the tech industry remains a critical component to the city's growth.
About the Project: The nearly 141,150-square-foot Rialto Building in San Francisco's SoMa (South Market Street) neighborhood is within walking distance of major tech headquarters, including Uber, Airbnb, LinkedIn, Asana and Salesforce. Sigma has redesigned its office space to accommodate a mix of employees' preferences, including a retrofit to the company's ninth level in the building to create a mixed-use collaborating space.
What the Judges Said: Sigma's renewal and expansion "is a positive development in the face of the dire state of the San Francisco tech scene and office vacancy," said Mary Alam, an executive vice president at NAI Northern California. The company's "back-to-work strategy and commitment to the area is a story that needs to be emulated in order for the once-thriving San Francisco tech scene and office market to recover."
They Made It Happen: The deal was brokered by JLL's Charlie Hanafin, Dominic Dowling and Matt Shewey, who represented Jamestown. Stephen Cisarik and Jeff Rodgers, both of Newmark, represented Sigma.
