One of the last top-tier venture firms to resist coming to San Francisco has apparently decided that it’s time to make the move. According to a source familiar with the thinking of Andreessen Horowitz, the firm is opening a San Francisco office later this year.
The WSJ had reported on Friday that the firm has signed a leasing agreement to move into 180 Townsend Street in the city’s China Basin neighborhood, not far from where the San Francisco Giants play baseball. (The park was known until January as AT&T Park; it has since been renamed Oracle Park.)
Our source says that the firm will not be shuttering its expansive offices on Sand Hill Road, where it set up shop immediately after opening for business in 2009. This person adds that a16z, as the firm is known, doesn’t plan to rent out an entire building. (Worth noting: 180 Townsend features more than 41,000 square feet.)
The move is notable, even amid a years-long trend of Silicon Valley venture capital firms that have opened offices in San Francisco and, in doing so, shifted the industry’s center of gravity 45 minutes north.
True Ventures was among the earliest venture firms to come to the city, originally setting up operations along the city’s waterfront and later moving its office to the popular South Park neighborhood, which is also now home to Kleiner Perkins, Accel, General Catalyst and New Enterprise Associates, among others.
Firms have also turned to the city’s Jackson Square neighborhood, roughly 1.5 miles away, on the other side of San Francisco’s financial district. Among those tenants: Jackson Square Ventures, NextWorld Capital, Catamount Ventures and Sway Ventures.
Andreessen Horowitz has long seemed happy to exclusively operate out of Menlo Park, not opening another regional office, and not entertaining the idea of opening a New York office, even as many of its peers were doing so years ago.
Our source says the firm began thinking more seriously about opening a second space in San Francisco at least a year ago before more recently deciding to pull the trigger. Undoubtedly, it will ease a long commute for some of its 150 employees, many of whom live in the city and will be dividing their time between both offices once its San Francisco location opens.
Clearly, the firm also wants to get closer to the founders it works with — and wants to work with — many of whom also prefer San Francisco to sleepier, if less crowded, parts south.
Leasing commercial space in San Francisco is as pricey as it has ever been. As the WSJ noted, citing data from the real estate group Cushman & Wakefield, office rent in San Francisco reached a record $75.57 per square foot in the fourth quarter of 2018, up 6.4 percent from the same period in 2017.
In addition to Andreessen Horowitz, Y Combinator looks likely to move to San Francisco this year; as we reported last week, the investment firm and accelerator program is currently searching for the right space to set up shop.