Yelp has inked an eight year lease for 100,000 square feet of the 295,000 square foot Pacific Telephone Building at 140 New Montgomery which is currently undergoing a major renovation and repositioning (click image to enlarge, link for details).
Yelp is expected to make its move from 650 Mission in the fall of 2013.
∙ 140 New Montgomery: The More Things Change… [SocketSite]
∙ 140 New Montgomery: Renovation And Rendering Scoop [SocketSite]
good news!
This one makes me nervous, feels a lot like 2000. Yelp lost $10M last quarter vs $3M in Q1 2011. They have been around for 8 years and operating expense is still growing faster than revenue. Remember Webvan and Pets.com? They had revenue too.
If there was a way to buy a credit default swap on this lease on the bet that yelp doesn’t pay through its term, or even close to it, I’d take it!
The bigger they get, the more money they lose. I’ve seen how that all ends.
These signings are always supposed to do something or another, but they really do very little. It’s like feeling richer because you moved money from one bank account to another.
They leave one building and move into another, creating a vacancy in the old building. If they have extra space in the new place, they can sublet the excess, so it doesn’t necessarily take space off the market.
It’s not even an indicator of growth: Sun Microsystems moved into a huge space in Menlo Park right before they started wave after wave of layoffs. HP, SGI, Yahoo — all signed big leases in the years before they laid off big time.
It’s good news for the real estate agents, but beyond that it’s hard to see much difference for almost anyone else here.
The good news comes from earnings, not leases. You can’t lease your way to prosperity. These things are always touted with great fanfare, but mean very little in practice.
Yelp is losing money. The losses are increasing. That to me tells me more about what’s happening in the local economy. A money losing company gets a certain degree of latitude. When the economy turns, and it always does, the investors grow impatient and the layoffs begin. Hopefully we’ll see profits out of Yelp, not leases. That’s what builds an economy.
Tipster – thats why CRE pros use absorption as a metric to measure demand, this deal represents positive absorption as they are an expanding tenant in that submarket
You guys are totally missing the key points. Look at the bottom picture again. Razor scooters, cappucino machine, dart board, and spherical chair.
These are people who wear belts with buckles that look like 70s car seatbelts, and they never take out their headphones. Ever. They bring golden retrievers to work and eat 5 burritos a week.
Stop living in the past and get with the times.
Great news indeed. Despite what the uber-perma bears are saying, I am loving these fantastic times. A great space was sitting empty and a growing company is going to move in. Seeing this building underutilized was disheartening.
Move over South Beach, SV, Media Gulch, etc… SOMA, FiDi and Downtown are where the action is now. All these people want to live and work in SF which is excellent news for or City.
It’s an expensive and risky project that has just gotten some more legitimacy. The Yelper’s will fit right in with the galleries and loitering AA students….and will be excited to see who takes the remaining 2/3rds and what’s going in on ground level. Oh – and if you haven’t seen – 140 New Monty and 680 Folsom are featured in the first 5 seconds of a Chrysler ad.
“The good news comes from earnings, not leases. You can’t lease your way to prosperity. These things are always touted with great fanfare, but mean very little in practice”
Actually, good news comes from productivity gains…the real driver of long term wealth. Earnings can be manipulated in so many ways.
That said, glad to see the beauty of this building be brought back to life.
Love this building and can’t wait to see it come back to life. Bring back the uplighting at night too!
It’s the damn skinny jeans that drive me nuts. Guys should NOT ever wear those things.
Futurist – THANK YOU!!
For the record, I don’t think they look good on anyone.
Wait, they’re out? Crap I just bought a ton of ’em. Guess I will go with plan B and start bringin back the parachute pants.
The good news, I think, is that this gives the building owners the motivation to rehab and modernize their buildings. Even if Yelp, Twitter, and Salesforce are just bubbles, the updated office space will remain usable for other businesses in the future. Which is far better than abandoned or obsolete office blocks.