New Relic will jettison two floors at its San Francisco headquarters after announcing it would shrink its real estate footprint to shave costs.
The locally based software analytics firm is putting half its hub up for sublease in the 12-story tower at 188 Spear Street, the San Francisco Chronicle reported.
The move comes after New Relic disclosed in a March regulatory filing it would significantly downsize its real estate to “provide further operating flexibility and position the business for its long-term success.” The shrinkage was expected to cost the company $45 million in lease terminations.
It follows a similar downsizing by tech and other companies across the Bay Area, which shed offices during a shift to remote work. The office vacancy in San Francisco is now a record 33.9 percent, according to CBRE.
New Relic has listed for sublease 36,665 square feet of furnished offices on the 11th and 12th floors, with views of the Bay Bridge and Ferry Building, according to a marketing brochure shared with the Chronicle. The offices are advertised at an annual rental rate of $58 per square foot, or $4.83 a month.
Brokers Matthew Dumanovsky, Steve Chaitin and Jon Wittemyer of CBRE hold the listing.
The offices for sublease include exclusive access to the building’s roof deck. They also include communal areas, exposed ceilings and “quirky meeting rooms” that typified the city’s tech culture before the pandemic.
At one point, it featured a common area and cafeteria on the 10th floor called “Nerdvana,” according to the newspaper.
The two floors are available until 2027, when the firm’s lease for its 73,400-square-foot headquarters expires, according to its lease agreement with Shorenstein Properties, owner of the building.
The office tower, built in 1972 and revamped in 2012, includes such tenants as Chase Bank and Amazon.com.
New Relic has gone through several rounds of layoffs in recent years. In June, the firm announced it planned to lay off more than 200 employees. A month later, it agreed to a $6.5 billion buyout to private equity firms TPG and Francisco partners.
New Relic once took up offices at 123 Mission Street, owned by e-cigarette maker Juul Labs, though sources told the Chronicle it no longer has a lease there.
— Dana Bartholomew