Airbnb Negotiating Big SF Office Expansion

Airbnb is deep in negotiations for what would be the biggest office lease in San Francisco this year, according to two people familiar with the matter. It would also make Airbnb one of the biggest office tenants in San Francisco, giving it room to grow as it heads toward a possible IPO next year.

The company is in talks to lease at about 250,000 square feet from the struggling gaming company Zynga, which has been quietly marketing half its building on Townsend Street a block from Airbnb’s headquarters on the edge of the city’s South of Market neighborhood. Proposed terms of the lease are unclear, but that amount of space could cost Airbnb about $15 million a year, given average rents in the neighborhood, according to real estate brokerage Cushman & Wakefield. A deal is expected to close by the end of the quarter, but could still fall apart.

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Ironically, Airbnb has done better than other startups in avoiding political land mines such as zoning violations that can doom office expansions. Pinterest, one of Airbnb’s neighbors, got into political hot water three years ago when it signed a deal to occupy a building zoned for manufacturing companies—not traditional offices—that was already occupied by small artisans. The deal was nixed and Pinterest has been able to expand in other spaces in the area.

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Airbnb is one of several prominent tech companies amassing so-called “urban campuses” in space-constrained San Francisco, along with nearby Pinterest, Salesforce and Uber.