Cruise looking to shed more office space
“Cruise is realigning resources, including real estate, to support our updated operations plan and more deliberate path back to our driverless mission.” Cruise statement
Robotaxi company Cruise is working to reduce its office footprint in San Francisco.
Late last week, the SoMaheadquartered company listed its roughly 110,000-square foot office at 345 Brannan St. available for subleasing, according to a brochure for the space. Real estate services firm CBRE has the listing.
The brochure shows that Cruise is looking to exit its office, which spans the entire five-story building, seven years early — the lease for the space expires in November 2031. It’s not the first time that Cruise has sought to shed office space in San Francisco.
Since at least 2021, a more than 80,000-square-foot office it once occupied at an adjacent building at 301 Brannan St. has been on the sublease market, according to a market report by real estate firm Colliers. The report noted that, at the time, Cruise maintained 300,000 square feet across 333 Brannan and 345 Brannan, as well as a 140,000-square-foot office at 1201 Bryant.
A real estate market participant with insight into Cruise’s leases confirmed Monday that the company still occupies about 190,000 square feet at 333 Brannan and its space at 1201 Bryant, though it is unclear whether Cruise is planning to part with a portion of those offices as well.
“As we’ve previously shared, Cruise is realigning resources, including real estate, to support our updated operations plan and more deliberate path back to our driverless mission,” a spokesperson for the company said in a statement Monday. “Our streamlined real estate footprint reflects the size of our current employee base and optimizes for providing Cruisers with a cohesive work experience as part of Cruise’s flexible work policy.”
At $1,327 per square foot, landlord Kilroy Realty Corp. paid the highest price per square foot ever recorded in San Francisco when it acquired 345 Brannan in 2019 specifically to house Cruise; the company was in talks to lease 333 Brannan and 301 Brannan, but needed more space.
The San Francisco Standard first reported the sublease at 345 Brannan.
The latest listing means that Cruise has at least 190,000 square feet of space in SoMa that it no longer plans to occupy. The desire to offload office space follows a challenging year for Cruise that saw the company lose its self-driving robotaxi license in San Francisco after one of its vehicles accidentally dragged a person downtown in October.
A pedestrian crossing the street at Fifth and Mission streets in downtown was hit by a regular vehicle and hurled into the path of a driverless Cruise vehicle, which then dragged the woman for 20 feet while attempting to pull over, causing severe injuries.
After the accident, the California Department of Motor Vehicles suspended Cruise from operating its driverless taxis in San Francisco for allegedly withholding footage of a severe crash involving one of the company’s robotaxis.
The California Public Utilities Commission later accused Cruise of withholding information regarding the accident. Cruise tried to settle the dispute with a $75,000 payment and promised to increase transparency around its accident data.
While its driverless license remains suspended in the city, its operations have also been impacted by layoffs and a more flexible work policy. In December the company laid of 24% of its full-time employees.
In 2022, Cruise implemented CruiseFlex, which gives its employees a choice over when they choose to work in the physical office.
Cruise’s office space dump adds to the more than 9 million square feet of office space that is available for subleasing, according to information provided by real estate firm CBRE. The overall amount of office space that currently sits vacant in San Francisco climbed to 36.6% in the first quarter of the year, which is more than nine times the amount of space that was available before the pandemic began in 2020.