All 14 floors that Yelp occupies at the historic Pacific Telephone & Telegraph Co. Building at 140 New Montgomery have been made available for lease this year, in another of a cascade of moves that have shaken up the once hot SF office market.
The San Francisco Business Times reported Wednesday that Yelp is abandoning almost 200,000 square feet of office space that it's held at 140 New Montgomery for most of the last decade, as the company is apparently downsizing its footprint in the city. A Yelp representative tells the paper that the company intends to maintain a headquarters in San Francisco, but obviously a smaller one now that most employees are working remotely, and it's not clear where.
It is also possible that Yelp intends to keep one or more floors of offices at 140 New Montgomery and is in negotiations to do so — the company did not confirm that, and this was based on some conjecture by a real estate agent. The company's lease for floors 2 through 13, signed in 2013, expires in October. Separately it has a lease for the 14th floor that doesn't expire until next year. It's possible that the company has decided not to use its option to renew, but the future is uncertain.
As the Business Times notes, Yelp has been signaling its frustration with the Bay Area, and it could be another example in a string of tech company departures and half-departures in the last couple of years.
In a November filing with the Securities and Exchange Commission, Yelp discussed how it "expect[s] to continue to face significant competition from other companies in hiring and retaining [qualified] personnel, particularly in the San Francisco Bay Area, where our headquarters is located and where the cost of living is high... Any further financial constraints we face as a result of COVID-19 may also harm our competitiveness in these talent markets."
Uber announced it was establishing a "second headquarters" in Dallas in August 2019, and both Oracle and Tesla recently announced big plans to locate operations in Austin — with Oracle saying it was moving its official headquarters from Redwood City to the Texas capital.
Facebook announced last May that it was taking employee requests to work remotely "forever," and Twitter announced in October that its employees could work remotely indefinitely as well — which puts in question how much space Twitter intends to occupy in the so-called Twitter building going forward.
Yelp's downsizing decision follows on big news last summer that Pinterest was backing out of a deal to lease a massive 490,000-square-foot space at the new 88 Bluxome Street complex in SoMa, citing the same issues of increased dependence on remote work that Yelp is citing.
Photo courtesy of 140 New Montgomery