Twilio has gone from a secondhand deal to direct lease for part of its 260,000-square-foot headquarters in San Francisco’s Financial District.
The fintech firm specializing in customer engagement software inked a deal for 83,000 square feet on the second floor of Rincon Center at 101 Spear Street, the San Francisco Business Times reported, citing a regulatory filing.
The deal includes a direct lease of three years from Los Angeles-based landlord Hudson Pacific Properties. Financial terms of the transaction weren’t disclosed.
Twilio had been subleasing the offices from Salesforce, on terms set to expire next month.
The second floor offices are part of a larger block Twilio subleased from Salesforce for its Rincon Center headquarters in 2018, according to the outlet.
The sublease includes 18,100 square feet on the first floor that expires on June 30, 2028; 83,000 square feet on the second floor that expires March 31; 75,000 square feet on the third floor that expires on June 30, 2028; 41,800 square feet on the fourth floor and 41,600 square feet on the fifth floor, which both expire on Dec. 31 of next year.
Twilio had tried to offload office space on the first, second and third floors up for sublease in 2022, according to marketing materials from Cushman & Wakefield. It’s not clear whether the direct lease would increase Twilio’s overall footprint at the building, or whether the firm might be planning to consolidate into the direct lease and let go of its space on other floors.
Twilio’s sublease listing went public after it announced it would shift to a remote-first work model that would allow employees to work from the office or home at their discretion.
The company said it occupied 83,400 square feet across the fourth and fifth floors of Rincon Center as of 2023, the most recent year for which reporting is available, according to the Business Times.
“While we continue to be a remote-first company, our corporate headquarters at Rincon Center provides Twilions with more flexibility and more opportunities for connection,” an unidentified Twilio spokesperson told the Business Times in a statement.
The company has stuck to its remote-first policy as tech sector peers such as Salesforce and Amazon.com have demanded employees return to the office.
A renewed demand for offices in San Francisco includes three quarters of the 100 business leaders surveyed by KPMG, who reported plans to grow their real estate footprint in the next 12 to 18 months.
The direct lease with Twilio is a boon for Hudson Pacific Properties, which owns 2.4 million square feet of commercial properties in the city, including the 531,700-square-foot Rincon Center.
The real estate investment trust reported Rincon Center’s occupancy rate at 97.8 percent in the fourth quarter, up slightly from the same period last year.— Dana Bartholomew
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