Lyft is joining an expanding pool of global tech giants in moving to offload a significant portion of its real estate footprint as it adjusts to a pandemic-related shift toward remote work.
The San Francisco-based ride-hailing company will sublease roughly half of its office space at its corporate headquarters and in Seattle; New York City; and Nashville, Tennessee, a spokeswoman confirmed to CoStar News. The four offices combined span about 615,000 square feet, about 45% of which will be up for grabs.
“Many of our team members opted to work remotely after we shifted to a flexible workplace strategy,” Lyft Vice President of Real Estate Development Rachel Goldstein said in a statement. “As a result, we have identified a significant amount of office space that isn’t being utilized the way it previously was.”
For its San Francisco headquarters at 185 Berry St., the company plans to shed 85,000 square feet once the lease expires next year, according to CoStar data. It will later dump an additional 160,000 square feet, cutting its original 419,000-square-foot hub in the Mission Bay neighborhood down by nearly 250,000 square feet. The company declined to say how much space it took in the other target cities or how much would be put up for sublease.
The downsizing plan comes several months after the ride-hailing giant said its corporate employees would have the option to work remotely on an indefinite basis. More than 4,000 office workers were allowed to pivot to a "fully flexible workplace" in March, a shift that meant employees had no requirements about when or where they chose to work.
“Our approach will always be about bringing people together, not forcing them together,” the company previously said about the transition out of in-person office space. The Lyft spokesperson said that since the decision was made, office attendance has "declined consistently."
Lyft and other tech companies, including Salesforce, Yelp, Dropbox, Zillow, Amazon and Facebook parent Meta, have been at the forefront of real estate decisions made to either downsize, relocate or get rid of office space altogether in order to adapt to an evolving pandemic. The impact has rippled across the national office market, sending sublet availability to record highs in some cities and creating a blueprint for companies in other sectors on how to balance a new type of work environment with their spatial needs.
A majority of the tech companies leading the pack are based in San Francisco, and the adjustments they've made to their corporate headquarters have hit the city especially hard in terms of office availability and dwindling leasing volume.
Vacancy has soared to about 15.5% across the regional office market, according to CoStar data, far beyond the roughly 6% reported at the beginning of 2020.