Impact Hub San Francisco at 15th and Mission.

The Impact Hub coworking space at 15th and Mission streets may well be closing its doors in the coming days, leaving a building full of nonprofits searching for a place to go. 

The bitter headline is that Impact Hub SF may be losing its lease this Wednesday, January 22, early in the morning,” says a memo sent to the building’s tenants on Monday and obtained by Mission Local. 

Impact Hub San Francisco has not yet been successful in “obtaining an agreement from the landlord to provide patience on meeting its obligations for the lease,” the memo says, though it adds there’s “some chance” it may be allowed to stay until the end of the month. An “emergency” town hall has been planned for 4 p.m. Thursday at the Redstone Building. 

“As many of you know, things have been rocky from a business standpoint since the move-in two and a half years ago,” the memo says. 

The note blamed competition from WeWork, the office space and co-working giant, for Impact Hub’s woes — the “free rent periods” WeWork offers and its “aggressive and cannibalistic sales tactics.” The letter also blamed Impact Hub San Francisco’s troubles on the complexities of being a small business in San Francisco. WeWork’s closest building is four blocks away at 11th and Mission streets — one of some 14 locations in San Francisco. WeWork, meanwhile, is having troubles of its own. 

In a tweet, Jennifer Berger, whose nonprofit About-Face is a tenant at the building, said that the nonprofits occupying the building were “being evicted” from the building on Tuesday “with no notice.” 

Berger later told Mission Local that many of the organizations operating out of the building were informed late Saturday that they would have to vacate. “It is unacceptable that this was not communicated to the tenants earlier — it put many of us into a complete tailspin,” she said. “And for us, it significantly impacts our work for the next few months. Having a space is really important.”

Berger estimated that some 15 organizations were displaced, but a firm count is unclear. Brittany Henry, the operations manager at Impact Hub San Francisco, whose email was included in the internal note, also has not yet responded to our inquiries.  

When reached by phone, Steve Drolapas, who according to deed records is the current owner, said he was “busy right now” and hung up. 

The letter to tenants says the organization is rallying the troops to convince the landlord to give the co-working space an extension — at least enough time to “come up with a plan.” It said leadership is having community members sign a letter of support both to the landlord and city officials “urging them to support the current efforts for reorganization and give us more time to turn things around here from a business perspective.” 

Impact Hub has more than 100 locations in more than 50 countries, according to its website. That website does not make its business model clear, though it describes itself as “the world’s largest community … and accelerator for positive change.”

Gabriela Gandel, Impact Hub’s global executive director, said in a statement that she is aware of Impact Hub SF’s “unfortunate situation.”

“We worked together with Impact Hub San Francisco’s local team while they were negotiating and fighting to keep their space, and we did our best to support them also while they were working on developing a more sustainable business model,” she said. “However, they are an independent entity and, after their relocation in 2016, they started dealing with unforeseen higher costs and intense competition, and have been unable to make the business model within this new building work.”

Julian Mark

Julian grew up in the East Bay and moved to San Francisco in 2014. Before joining Mission Local, he wrote for the East Bay Express, the SF Bay Guardian, and the San Francisco Business Times.

Join the Conversation

6 Comments

  1. Did Impact Hub not pay their rent? Sad for the subtenants, but master tenant arrangements like this need some more transparency. Also, where did the subtenants’ rent money go if not to the actual landlord?

    1. Yeah, something missing from story for sure. If the businesses paid Impact Hub rent and Impact Hub didn’t pay the landlord, I’d assume the tenants can sue for lots of money. Seems like Impact Hub is a poorly run company with crybabies doing their PR. If your competition is beating you, you need to step up your game or go out of business. Guessing the latter is going to happen…..

      If Impact Hub cannot figure this out on their own, they should fail as a business and go away. They are a large national corporation and should not be given any favors from the city.

      Really sucks for the small companies that were paying rent and now have to scramble to find a place. I hope they collect a lot of money in a lawsuit against Impact Hub.

  2. “And for us, it significantly impacts our work for the next few months. Having a space is really important.”

    The note blamed competition from WeWork, the office space and co-working giant, for Impact Hub’s woes — the “free rent periods” … WeWork’s closest building is four blocks away at 11th and Mission streets — one of some 14 locations in San Francisco.

    Seems like the solution in 4 blocks away, comes with free rent periods too!

  3. This story should be updated to reflect that the San Francisco Sheriff has evicted the tenant. The building is now vacant and has sheriff’s no trespassing notice on the front doors.

  4. The Impact Hub had trouble finding anchor tenants fast enough and suffered for a time from a high volume of recurrent non-paying ‘visitor drop-ins’. It seemed from the get-go that the owners (who are out of state and were not very involved) did not provide the management or adequate funding necessary to make the space functional and appealing for the office rental/co-working marketplace. The street issues nearby and broken front window, etc. also were a challenge for the professionalism of the space. It is a shame for all the great orgs working there that there was so little transparency and communication. Given the ethos and intention of the space, this is a really sad and unfortunate end.

Leave a comment

Your email address will not be published. Required fields are marked *