A business travel startup valued at more than $7 billion has booked a new destination for its headquarters in Palo Alto, picking a spot that’s a five-minute drive away and less than half the size of its current digs.
TripActions is relocating to a 31,600-square-foot office at Jay Paul Company’s 3045 Park Boulevard, according to the travel company’s head of real estate, Jeff Shadoian. That’s less than half of the 67,500 square feet it occupies at Stanford Research Park. Its new Class A space is about a mile and a half north of its old one, and closer to Palo Alto’s California Avenue shopping and business district.
3045 Park Boulevard (Photo By Matthew Niksa)
The two-story Park Boulevard office, while smaller, will have more meeting areas and conference rooms than the company’s former headquarters, Shadoian said. The site offers more outdoor space, fewer desks, and better access to public transit, he said. It’s less than half a mile from a Caltrain station and an estimated eight-minute walk from California Avenue, home to a grocery store and numerous shops and restaurants. TripActions’ Stanford Research Park address, 1501 Page Mill Road, is about 1.5 miles from the nearest Caltrain stop and surrounded by single-family homes, housing for Stanford University faculty and staff, offices, and research properties.
TripActions’ decision to trim space puts it in line with more than a dozen other firms and companies across the Bay Area with offices of at least 50,000 square feet that shrunk or disclosed plans this year to shrink their footprints. What separates the 7-year-old startup from others in that group is it’s always had a hybrid work model. It’s seeking to get more out of less space: Its new HQ, which will occupy the entire Park Boulevard building, will accommodate all of the employees working out of its Page Mill Road office plus future hires, Shadoian said. He didn’t disclose TripActions’ Palo Alto headcount.
TripActions’ move also reflects the ongoing “flight to quality” trend in the Bay Area’s office market, in which companies prefer newer Class A properties over older buildings with fewer amenities. The site of the startup’s new base was completed in 2019, has never been occupied, and isn’t part of a larger complex such as the company’s current headquarters at the Stanford Research Park, which was built in 1957.
The flight to quality has picked up steam during the pandemic as more high-quality offices have become available for rent than at any point in recent memory. Tenants have had more premium office options to choose from than before, which helps explain why such space accounted for almost 80 percent of all office leases in San Francisco in the first quarter, according to Avison Young data.
The headquarters move comes as TripActions, which has raised almost $1.3 billion to date, is in talks for a new funding round that would peg its valuation at around $9 billion, Bloomberg said in May. The startup built its reputation on an online platform that combines several aspects of booking a business trip, such as flights, rental cars, and hotels, with tracking expenses.
It has raised about $780 million during the pandemic and said in October, after a $275 million funding round brought its valuation above $7 billion, that its booking volumes and revenue topped pre-pandemic levels, TechCrunch reported at the time. That’s a far cry from where it was at the start of the pandemic, when it laid off 300 employees, including 106 in Palo Alto and 39 from its San Francisco office, after 95 percent of its revenue vanished in just three weeks, according to the Silicon Valley Business Journal.
The company occupies the 21st floor of an office high-rise in San Francisco’s financial district and has offices in Seattle, New York, Dallas, Austin, Salt Lake City, and abroad. It had about 1,500 employees worldwide as of October, almost double the number of workers it had when it conducted layoffs in March 2020, according to TechCrunch.
Shadoian declined to disclose the length of TripActions’ lease term on its new headquarters or how much it’s paying in rent at the start of it. The building’s asking rental rate was $8.75 a square foot a month, according to listing broker Newmark’s website. That’s more than $1 per square foot higher than Palo Alto’s average office asking rental rate of $7.54 a square foot a month, and $2.70 a square foot a month higher than the city’s average asking rate for research space, according to the latest Newmark data.
A broker with indirect knowledge and no involvement in the transaction told The Real Deal that TripActions signed a long-term lease on 3045 Park Boulevard in mid-June. Newmark’s Howard Dallmar and Phil Mahoney represented landlord Jay Paul in the deal, while T3 Advisors’ David Bergeron and Bo McNally represented TripActions. Jay Paul and Newmark declined to comment, while Bergeron directed questions about the deal to Shadoian and TripActions.
Shadoian declined to comment on TripActions’ plans for its former headquarters space in Building 1 at 1501 Page Mill Road. Two brokers who requested anonymity told The Real Deal that TripActions no longer controls that space, implying that it and building owner HP Inc. agreed to terminate TripActions’ lease before it expires in August 2025. (For context, HP owns the seven-building complex at 1501 Page Mill Road but not the land underneath it, which the Stanford University Board of Trustees owns).
Although TripActions was leasing about 99,000 square feet across two floors in Building 1, akin to roughly 70 percent of the property, it was occupying only the 67,500-square-foot upper level, the two brokers who requested anonymity said. The company agreed in the fourth quarter of 2019 to lease space on the building’s lower level, expanding its presence across the entire structure to 98,690 square feet. However, the company never built out its offices on that floor, instead leaving it in shell condition.
Shadoian said TripActions never had plans to build out the lower level but didn’t elaborate further. Tech company HP and JLL, which represented it in TripActions’ 2019 expansion at 1501 Page Mill Road, didn’t respond to requests for comment.
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