Yelp is vacating about 450K SF of office space it currently occupies in NYC, Chicago and DC after the results of a company-wide survey found that 86% of employees preferred to work remotely.
In a blog post last week entitled The Future of Work is Remote, Yelp CEO Jeremy Stoppelman announced that Yelp would vacate its leased offices in the three cities on July 29. Stoppelman did not specify what would be done with the leases.
In NYC, Yelp has a lease on 70K SF lease of office space in a Fifth Ave. building owned by Clarion Partners and a lease on 200K SF in a Madison Ave. building owned by SL Green and PGIM. In Chicago, Yelp has a lease for 132K SF of office space at the Mart, owned by Vornado Realty Trust.
Since 2017, Yelp has occupied 52K SF at a Terrell Place office building in DC’s Chinatown. According to reports, Yelp has for several months been offering a portion of its footprint in New York and Chicago for sublease.
Stoppelman said it had become clear during the last nine months—the company began reopening its offices nine months ago, but it did not require workers to return to the office—that the company did not need the office space.
The Yelp CEO said weekly office utilization in the offices it is planning to vacate had averaged less than 2%. “The most telling signal for us that people strongly prefer remote work has been the under-utilization of our offices,” Stoppelman said, in his blog post.
Yelp will continue to maintain a small office footprint in Phoenix.
Yelp’s full embrace of remote work is the latest announcement in what has become a parade of tech companies announcing office closures in tandem with remote work strategies.
TaskRabbit announced last month that it is vacating its offices nationwide, including its headquarters in San Francisco. The company began its shift away from in-person office work during Q1 2022.
“I tend to believe that the future of work looks very different than the way work looked a couple of years ago, and so we are at the forefront of really becoming a remote-first company where we don’t force people to go back into the office,” said Ania Smith, TaskRabbit’s CEO, in an interview with the Washington Post.
The embrace of remote work by an increasing number of tech companies has put a crimp in San Francisco’s hopes for a recovery of the city’s office sector, which is lagging behind other US markets.
Office occupancy in San Francisco is 35%, according to the latest weekly average from Kastle, which surveys entry-card swipes in 10 US cities.
The migration of tech players from in-office to remote work also is having an impact in the heart of Silicon Valley: the only market in this week’s report from Kastle with a lower occupancy average than San Francisco is San Jose, which registered 34%.