Moving Into Twitter's and Yammer's Neighborhood, Square Backfills Large Amount of Space being Vacated by Bank of America in Hudson Pacific Properties Bldg.
Fast-growing tech firm Square, Inc., a three-year-old company whose service enables shoppers to charge purchases with their mobile devices, agreed to lease four full floors encompassing 246,078 square feet at 1455 Market Street in San Francisco. Square also has an option to take an additional 81,354 square feet, for a combined commitment of 327,432 square feet of space, backfilling a large portion of the space being vacated by Bank of America.
"This new lease represents a long term commitment from a leading technology company at starting rents above our underwritten and expiring rents for this same space," said Victor J. Coleman, Chairman and CEO of Hudson Pacific Properties (NYSE:HPP
), owner of the 22-story building.
With more than 1 million square feet of office, retail, data center, parking and storage space and among the largest floorplates in the city, the building is located in the Mid-Market submarket of San Francisco, an emerging technology and business hub. Square's new offices are in close proximity to both Twitter’s new corporate headquarters and the offices of social-network firm Yammer at 1355 Market St., as well as Dolby Labs at 1275 Market St. Twitter recently leased another 215,000 square feet in a nearby building from Shorenstein Properties.
Square had all of 10 employees in December 2009. It has since grown to more than 400 employees, and expects to have nearly 1000 employees by the end of 2013. Starting with a free credit card reader for the iPhone, iPad, and Android devices, Square's service allows mobile devices to accept credit cards. Another service, Square Register, serves as a full point-of-sale system for businesses to accept payments, track inventory, and share menu and location information. Its other service, Square Wallet, enables individuals to pay with their names at their favorite local businesses and store receipts.
Zach Siegel and J.D. Lumpkin of Cushman & Wakefield represented the landlord Hudson Pacific. Square was represented by Jenny Haeg of Custom Spaces.
Square's office lease will commence in phases, with the first move into181,805 square feet scheduled for early 2013, another 15,741 square feet in July, 2013, with the remaining 48,532 square feet in early 2014. Square has the option to take an additional 81,354 square feet with a scheduled commencement in early 2014, which would result in a combined 327,432 square foot lease. The exercise of the 81,354 square foot option would result in the backfill of a total of 288,114 square feet of space currently occupied by
Bank of America, the buildings current largest tenant.
Hudson Pacific acquired 1455 Market Street in late 2010 for approximately $93 million shortly after the company's debut as a publicly traded REIT in a transaction with Bank of America and Strada Investment Group.
The building was originally constructed in 1977 as a build-to-suit for Bank of America, where it operated a data center and related administrative functions, at one time occupying approximately 836,000 square feet.
CoStar News Director Tim Trainor contributed to this report.