Yahoo Subleases Smaller Offices in San Francisco’s SoMa

Yahoo is packing its desks in San Francisco and moving to smaller offices across South of Market.

The New York-based tech media firm has subleased 35,400-square-feet on the 14th floor at 680 Folsom Street, the San Francisco Business Times reported. The firm turns on the lights on March 25. Terms of the sublease deal from Asana were not disclosed.

Yahoo made the move into the 14-story, 465,000-square-foot tower owned by Boston Properties after giving up its long-term digs at 110 Fifth Street, where the lease ended last year.

The tech firm previously leased some 72,000 square feet at the Hearst-owned building in SoMa, according to the San Francisco Chronicle, also owned by Hearst. Yahoo also has a 78,000-square-foot office in Mountain View.

“Investing in the Bay Area has long been important to Yahoo,” Erin Miller, a spokeswoman for Yahoo, told the Business Times, adding its new office at 680 Folsom reflects Yahoo’s continued commitment to San Francisco.

Yahoo CEO Jim Lanzone also doubled down on San Francisco.

“Always long on the Bay,” Lanzone wrote in a February tweet announcing the company’s new office, in which he reposted a Wall Street Journal article titled “Tech Leaders Fled San Francisco During the Pandemic. Now, They’re Coming Back.”

Yahoo, once based in Sunnyvale, was sold to Verizon in 2016. The communications firm then combined it with its AOL business and sold the online properties, once again known as Yahoo, in 2021 to funds controlled by Apollo Global Management.

Asana has reconsidered its 2022 sublease with Macys.com in 2022, in which the locally based management software firm had taken up the 13th and 14th floors at 680 Folsom.

After subleasing the top floor to Yahoo, it has placed the 13th floor up for sublease, reversing its decision to take up offices in a building that once housed Microsoft, Slack and Macy’s e-commerce division. JLL holds the listing for Asana’s offices.

As of the end of last year, the building was 98.7 percent occupied, according to a regulatory filing by Boston Properties.

Asana leases 266,000 square feet of offices for its headquarters at 633 Folsom Street, across the street from Yahoo’s new San Francisco home.

The company said in regulatory filings this month it expects to collect $1.56 million in sublease income for the Yahoo deal, suggesting Yahoo is paying around $44 per square foot for its space at 680 Folsom, according to the Business Times.

The firm’s rent is slated to escalate each year of its lease, which runs through 2028.

The vacancy in San Francisco’s 86 million square feet of offices was 32.5 percent in the fourth quarter, according to Cushman & Wakefield. At the same time, CBRE pegged the city’s vacancy at 35.9 percent.

— Dana Bartholomew