San Francisco is losing one of its most valuable tech startups.

Stripe, the payment processing company valued at $35 billion, signed a lease Wednesday for a 421,000-square-foot headquarters in South San Francisco. The company will move more than 1,000 employees just 10 miles south of its current South of Market headquarters, which it plans to vacate.

The move, expected in the second half of 2021, will be one of San Francisco’s largest corporate departures and the largest by a tech company during the current boom. Stripe is the second-most valuable private U.S. startup behind Juul, which was last valued at $38 billion, according to data firm PitchBook. It’s raised over $1 billion from venture capitalists and has over 2,000 employees globally.

Stripe said the city’s lack of office space was the primary reason for the move, with the vacancy rate below 5% downtown. Stripe’s new home at Kilroy Oyster Point in South San Francisco has a total of 2.5 million square feet of approved space, giving Stripe plenty of room to expand further.

“We’re really fortunate to have found a new home just a few miles down the road in South San Francisco. The new development at Oyster Point will allow us to keep growing our team in the Bay Area for many years,” said Peter Travers, Stripe’s head of workplace.

In the past year, pharmaceutical company McKesson Corp. and construction and engineering firm Bechtel both moved out of San Francisco, while tech has continued to expand. But Stripe decided to join the exodus.

The move is an alarm bell, said Jay Cheng, public policy director at the San Francisco Chamber of Commerce.

“Stripe is just tip of the iceberg. If we’re not thoughtful about our local business policies, this could be part of a trend,” Cheng said. “Ironically, we’re making it tougher, not easier, for companies to stay.”

He cited potential new restrictions on office development and a proposed office fee increase as new obstacles.

The demand for San Francisco office space continues to grow while supply isn’t sufficient. There are 168 tenants looking for 7.1 million square feet in San Francisco, according to brokerage Cushman & Wakefield. Only two major office projects, 5M and Oceanwide Center, are under construction.

Stripe looked around the region and found South San Francisco to be the most compelling location. Travers said the company wants to keep all its Bay Area employees in one location, which is why it doesn’t plan to keep the San Francisco office.

Though Stripe also strongly opposed last November’s Proposition C, which raised business taxes to fund more homelessness services, the company said that wasn’t a major factor for the move. Another major opponent, Square, expanded to Oakland after Prop. C passed but remains headquartered in San Francisco.

South San Francisco has no gross receipts or payroll taxes, said Mike Futrell, its city manager. It has a business license fee up to $125,000 per year and relies on mostly its property, sales and hotel taxes, he said.

“We are ‘The Industrial City.’ We take that heritage seriously to be business-friendly,” Futrell said. “We focus on that. We still value good jobs.”

Alex Tourk, spokesman for sf.citi, a tech business group, said San Francisco needs to consider changes to its business taxes. The city is currently reviewing the tax system, which brings in a total of $1 billion annually. But those taxes could climb higher under the revised system.

“Unfortunately, Stripe choosing to leave town is not an anomaly,” he said. “The membership of sf.citi would prefer a more holistic strategy per the mayor’s suggestion that we work together as a collective business community to fix the gross receipts tax once and for all and establish a fair and equitable tax system that we can all rely on.”

Chris Thornberg, founder of Beacon Economics, said businesses leaving San Francisco has more to do with real estate costs and high wages than taxes.

“Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years,” Thornberg said. Stripe is staying in the Bay Area, so its departure isn’t a blow to the region, he said.

Stripe focuses on digital payments and its success is tied deeply to rest of the technology sector’s boom.

Brothers John and Patrick Collison grew up in Ireland and founded Stripe in 2010 in Palo Alto. It moved to San Francisco in 2012. They distilled the complex, creaking infrastructure of online payments into a handful of lines of code that could be inserted into a client’s website to enable online payments. The company has millions of clients, including tech giants Google, Amazon and Uber, and traditional retailers like Target and brands like Under Armour.

Stripe declined to disclose its rent on its 12-year lease, but another recent deal in an adjacent building at Oyster Point — with muscle treatment company Cytokinetics — starts at $65.40 per square foot annually. That’s below San Francisco’s average rent, which is above $80 per square foot and can exceed $100 per square foot in new projects.

“The speed at which this project has come together speaks to the state of the current commercial real estate market, where demand remains strong and supply is extremely limited,” John Kilroy, CEO of project developer Kilroy Realty, said in a statement. “This is true up and down the entire West Coast, but it’s especially acute in the San Francisco Bay Area.”

Stripe signed the Bay Area’s fourth-largest lease of 2019, according to brokerage Cushman & Wakefield, behind Google and Verizon deals in San Jose and Pinterest’s lease in San Francisco.

Futrell, South San Francisco city manager, said Stripe is now the city’s biggest tech tenant.

“We’re known for being the largest biotech hub in the world,” he said. “We welcome the diversity.”

Stripe’s future office is farther from Caltrain and other public transit compared to its current office at 510 Townsend St. in South of Market. But the new office is close to a ferry terminal with service to Alameda, Oakland and Richmond.

Alexander Quinn, Northern California research director at real estate brokerage JLL, said South San Francisco gives Stripe more growth potential.

“It creates a campus environment that they can’t necessarily have in Oakland or in San Francisco,” he said.

But he said he thinks that San Francisco will continue to thrive.

“As long as the tech industry and startup scene exists in San Francisco, we’ll continue to have a vibrant, healthy market,” he said.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf