Amazon Leaves One SF Tower as Tech Firms Move Into Another Nearby

Amazon is in the process of vacating a 130,000-square-foot office located at 188 Spear Street, one of its three main offices in San Francisco. This space, which spans more than half of the 12-story building, is currently being marketed for direct leasing, despite the company’s lease not expiring until early next year.

A spokesperson for Amazon confirmed to the Chronicle that the company is considering closing this office as part of an ongoing evaluation of its corporate space. The representative emphasized that the decision is aimed at better serving the business, employees, and customers by potentially bringing teams closer together and facilitating collaboration across different departments.

The situation at 188 Spear St. stands in contrast to what is happening just three blocks away at the 181 Fremont tower. This high-rise, completed in 2018, has become a hub for startups, artificial intelligence firms, and other new tenants. It once housed Meta (formerly Facebook), which had a long-term lease that expired in 2031. However, after the pandemic, Meta subleased much of its space, leading to a surge in sublease availability in the area.

Despite the challenges of high vacancy rates, there are signs of recovery in San Francisco’s office market. Recent leasing activity has shown momentum not seen since before 2019. However, some major companies, including Dropbox, continue to relinquish their long-held offices, adding more available space to an already saturated market.

At 188 Spear St., the situation is evolving. New Relic, the building’s second-largest tenant, recently sought a subtenant for roughly half of the four floors it occupies. The entire 55,000-square-foot office is now being marketed for direct leasing. While the building owner, Shorenstein Properties, has not commented on these developments, the ground floor still houses a Chase Bank branch that remains open.

In contrast, 181 Fremont has experienced a remarkable turnaround. Once struggling with vacancies, the building has attracted a diverse range of tenants, including AI startups like Mercor and Lila Sciences. These companies have taken over spaces previously occupied by Meta, signaling a shift from a single large tech occupant to a more fragmented tenant base focused on emerging technologies.

The demand for move-in ready spaces has been particularly strong among AI startups. Robert Sammons, a senior research director with Cushman and Wakefield, noted that smaller built-out subleases have leased well over the past year, as have larger blocks of space. This trend has created a sense of urgency among tenants who are eager to secure prime locations before they are taken.

While the future of older buildings like 188 Spear St. remains uncertain, the current dynamics in San Francisco’s office market highlight both the challenges and opportunities facing the city. As AI and other emerging industries continue to shape the landscape, the question remains whether traditional office spaces can keep up with the pace of change.