Financial technology firm Chime moved into its new corporate headquarters in downtown San Francisco less than a year ago, but already the company is looking to dump some of its unwanted space as it joins other tech firms adapting to a worsening economy and uncertain financial outlook.
The company, which signed the city's biggest office deal of the year in 2021, has listed two of the six floors it occupies in the tower at 101 California St. for sublease, according to a CoStar listing. The space is a roughly 35,500-square-foot chunk of the 194,440 square feet Chime leases in the Hines-owned tower, and based on information in the listing, has never been occupied.
Tech companies have been making deep cuts to their real estate portfolios by shutting office locations, subleasing unwanted space, terminating prelease agreements and walking away from future investments.
At the same time, sublease availability across the country is also surging as the long-term effect of flexible and hybrid work has reshaped office demand. Tech companies such as Robinhood, Airbnb, Salesforce and Twitter have contributed to the bulk of the sublease listings, many of which have been concentrated in top-tier markets such as San Francisco and New York City.
More than 230 million square feet of sublease space was available nationwide at the end of the third quarter, according to CoStar data, a roughly 90% spike compared to the end of 2019.
San Francisco alone is home to nearly 10.5 million square feet of sublease space — about 5.5% of the city's entire inventory — and New York City has about 30 million square feet sitting on its sublet market.
Biggest US Occupancy Losses
For San Francisco, a market that has been among the slowest in the country to bring workers back to physical office space, the uncertainty and waning demand have hit hard.
The city has suffered the most severe office occupancy losses among the nation's largest cities since the start of the pandemic, according to a CoStar analysis.
The more than 10 million square feet of office space that has been vacated is on par with the amount of space tenants emptied in San Francisco during the dot-com bust of 2000.
A Chime spokesperson confirmed the listing with CoStar News, adding the company leased the space "opportunistically," based on its growth and future expectations.
However, after laying off about 12% of its 1,300-employee workforce last month, those expectations have shifted alongside other tech companies that are grappling with what appears to be the end of a pandemic-era growth spurt.
"We’ve seen Chimers embrace working collaboratively in our office and, by subleasing a portion of our space, we are allowing for the optionality to flex and grow our physical space as needed," the spokesperson said.
Chime, which offers banking services through websites and smartphone apps, has enlisted help from brokerage Cresa to market the listing. The sublet listing joins the nearly 375,500 square feet of space that is already available in the 48-story office tower.