Record-high office vacancies in San Francisco mean it will be a tenant’s market for the foreseeable future. This year kicked off with a deal that demonstrates just that.
Rakuten International, a subsidiary of the Japanese tech conglomerate locals might recognize as the jersey sponsor of the Golden State Warriors, announced on Monday it is moving from its old offices at 160 Spear St. and into a larger space around the corner at 300 Mission St.
The company is currently moving into the 29,000-square-foot 18th floor of the building and sees the new deal as a renewed “commitment to the city,” Rakuten said.
Previously, Rakuten’s roughly 160 San Francisco workers had been split between two separate floors at Spear Street, which it had occupied since 2015. That lease has since expired.
“Our former location’s 24,000 square feet were spread across two floors with outdated layouts that were increasingly at odds with collaborating effectively,” Amit Patel, CEO of Rakuten International, said in a statement.
The 18th floor at Mission Street on the other hand, will have more amenities, conference rooms and collaboration spaces for Rakuten employees, Patel added. According to listings, the 24-story building was built in 1968 and was renovated in 1995 and 2007. Other tenants include Instacart, Equinox, Mendocino Farms and Autodesk.
Workplace review company Glassdoor leased four floors at 300 Mission in 2019 during the relocation of its headquarters from Mill Valley to San Francisco. But after the pandemic scuttled plans to move hundreds of employees into the building, the company subsequently listed two floors for sublease—which inherently offers cheaper and/or more flexible terms to prospective tenants.
E-commerce company eBay snapped up one floor in 2021, and now Rakuten has taken another.
The Japanese company’s U.S. headquarters is based in nearby San Mateo, at 800 Concar Dr., and Rakuten has over 550 employees in the Bay Area. Rakuten International spokesperson Shawn Roberts confirmed its employees are required to come into offices at least three days per week.
About half of the company’s employees nationwide are assigned to offices, Roberts said.
Rakuten’s business centers on its e-commerce website, sometimes referred to as the “Amazon of Japan,” launched in 1997. The success of that platform has since spawned a financial services arm and even a mobile service network which launched in 2020.
Of note, Rakuten Group has posted 13 straight quarters of operating losses, mostly due to its aforementioned mobile unit, which has been troubled by a poorly received rollout and spiraling costs.
Real estate brokerage firm JLL represented Rakuten in its latest sublease at 300 Mission.