Square Relocating Amid Plans to More Than Double Staff
Square Inc., a startup that plans to double its workforce by the end of next year, is moving its headquarters to San Francisco’s Central Market neighborhood, joining an expanding group of technology companies in the area.
Square intends to occupy 150,000 square feet (13,900 square meters) at 1455 Market St. by mid-2013, said Jude Komuves, vice president of people. The company, which makes credit-card readers for smartphones and tablets, plans to increase employment to more than 1,000 workers from 400, she said. The building is owned by Hudson Pacific Properties Inc.
Square announced plans to start processing payments internationally this year and struck a deal with Starbucks Corp. (SBUX) that puts the company’s technology in 7,000 of the coffee maker’s U.S. stores. That expansion will require more space for staff, Komuves said. Square competes in a market for mobile payments for physical goods that may grow to $170 billion by 2015 from about $60 billion last year, according to Juniper Research Ltd.
“We’re only taking a couple of floors to start, but we have the option to expand into significant portions of the building,” Komuves said in an interview. “We’ll have a chef’s kitchen that will be ours to design and develop, and there will be really open collaborative work environments with lots of different types of seating.”
Square’s lease is for about 250,000 square feet, with the additional space ready in the second half of 2013, said J.D. Lumpkin, Cushman & Wakefield Inc.’s co-listing broker for the property. It includes the option for another 81,350 square feet, Hudson Pacific said in a separate statement.
The Central Market neighborhood has attracted companies including Twitter Inc., which relocated to 1355 Market St. earlier this year. Dolby Laboratories Inc. (DLB), the audio-technology company whose products are used in cinemas, recording studios and video games, agreed in June to buy a 16-story tower in the area to make the building its new headquarters.
Occupancy in San Francisco’s Central Market area rose by 188,601 square feet in the year through Sept. 30, most of that from Twitter’s 164,051-square-foot expansion at 1355 Market St., according to data from brokerage Cassidy Turley.
San Francisco’s office market added 1.43 million square feet in occupancy in the first nine months of 2012, Cassidy Turley said. The vacancy rate rose to 9.7 percent in September from 9.4 percent in June as financial firms consolidated space. Asking rents in the Central Market submarket averaged $42.30 a square foot in the third quarter, according to the company.
Square’s new building has 1 million square feet of office space and was used as a data center and administrative offices by its former owner, Bank of America Corp., before it was acquired for $93 million in December 2010 by Los Angeles-based Hudson Pacific, Lumpkin said.
Square’s new hires will be mostly engineers and designers as it vies with mobile credit-card readers from EBay Inc.’s (EBAY) PayPal, Intuit Inc. (INTU) and VeriFone Systems Inc. (PAY) Closely held Square, created by Twitter co-founder Jack Dorsey, is processing more than $8 billion in transactions on an annualized basis.