Yahoo is blasting into San Francisco with plans to lease 200,000 square feet downtown. The search engine and portal company has signed a letter of intent at 475 Sansome St. and has a 90-day exclusive right to negotiate, according to sources familiar with the deal.
A Yahoo spokesperson declined to comment. Rreef, which owns the buildings, did not respond to a request for comment. Should the deal be consummated, it would mark the first major tech company to establish a city presence since Microsoft’s entrance in 2000. The Redmond, Wash., giant leases 45,000 square feet at 1 Market St.
Sun Microsystems leased 525,000 square feet at Foundry Square in 2000, but never occupied the space, while other companies like Macromedia and Salesforce.com, have long been headquartered here, but have much smaller staffs and revenue.
With $3.5 billion in revenue last year and headcount growing at 38 percent a year, Yahoo’s move is a logical one. The Sunnyvale-based company has offices around the globe and is continuing to add staff. It has 612 positions now open at its Sunnyvale headquarters.
With the talent pool in the Peninsula and South Bay tightening — other tech companies are also on hiring binges — creating a San Francisco presence could make recruiting easier.
Indeed, Yahoo archrival Google has 354 open positions at its Mountain View headquarters and is also hiring aggressively around the world. Google is also looking to establish an office in San Francisco and is searching for 200,000 square feet now, but has yet to sign a letter of intent, according to real estate sources. A Google spokesperson declined to comment.
Still, recent company moves — including a public offering of $4 billion to increase cash reserves to $7 billion — signal the firm plans to accelerate its already ambitious transformation from a search engine to a media company through acquisitions.
With Yahoo taking 200,000 square feet, it will boost net absorption to nearly 800,000 square feet so far this year, reduce the 17 percent vacancy rate in the city and, possibly, push asking rents higher.