OpenAI expands new S.F. campus, signs another huge office lease nearby – San Francisco Chronicle
Construction work is seen in progress at 550 Terry Francois Blvd. in San Francisco, in 2023. Sources say OpenAI has leased the property.
Construction work is seen in progress in 2023 at 550 Terry Francois Blvd. in San Francisco, where OpenAI will expand its office space.
Artificial intelligence giant OpenAI has signed off on a second major expansion in San Francisco, in another lift for the city’s beleaguered office market.
The company has finalized a 315,000-square-foot lease at 550 Terry Francois Blvd. in Mission Bay, according to a real estate market participant with direct knowledge of the deal who confirmed it Friday.
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The location is just a block from OpenAI’s blockbuster 486,600-square-foot sublease from Uber at 1455 Third St. and 1515 Third St., signed last October. OpenAI’s new deal is the city’s largest office lease of 2024 and largest since last year’s expansion.
OpenAI and DivcoWest did not respond to inquiries from the Chronicle. Raise Commercial Real Estate, which represented OpenAI in the lease deal, also did not return messages seeking comment.The San Francisco Business Times first reported that the pending deal had closed Friday.
The Chronicle reported in April that OpenAI, the San Francisco company that is best known for developing chatbot ChatGPT and has been growing rapidly in the city over the past year, was in talks to expand its footprint at 550 Terry Francois — Old Navy’s former six-story headquarters in Mission Bay — despite rumors that the company might expand into the rest of Uber’s four-building campus in the neighborhood.
One market insider told the Chronicle that OpenAI has also been actively searching for space in other markets: the company reportedly is seeking a 200,000-square-foot office space in New York City and a 50,000-square-foot office in Seattle.
San Francisco continues to be the epicenter of the AI boom, with the highest share of venture funding of any region.
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But the sector’s growth has not offset major office space cutbacks during the pandemic. San Francisco’s office vacancy rate was a record 36.6% in the second quarter of the year, according to brokerage CBRE.
OpenAI’s growth shows continued tech interest in the Mission Bay neighborhood, where office vacancy has exploded during the pandemic as firms reduced their footprints: Dropbox has given up or subleased more than 40% of its originally 750,000-square-foot headquarters. Uber never occupied around half of its headquarters, which is now being subleased to OpenAI.
That coincides with a downturn in the biotech industry, which has seen numerous layoffs in the past two years. The area had previously morphed into a hotbed for the biotech industry, housing companies such as FibroGen and Nektar Therapeutics, and boasted a 1% vacancy rate as recently as 2021.
Reach Roland Li: roland.li@sfchronicle.com; Twitter: @rolandlisf. Reach Laura Waxmann: laura.waxmann@sfchronicle.com
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Roland Li covers commercial real estate for the business desk, focusing on the Bay Area office and retail sectors.
He was previously a reporter at San Francisco Business Times, where he won one award from the California News Publishers Association and three from the National Association of Real Estate Editors.
He is the author of “Good Luck Have Fun: The Rise of eSports,” a 2016 book on the history of the competitive video game industry. Before moving to the Bay Area in 2015, he studied and worked in New York. He freelanced for the Wall Street Journal, the New York Times and other local publications. His hobbies include swimming and urban photography.
Laura Waxmann covers the business community with a focus on commercial real estate, development, retail and the future of San Francisco’s downtown. Prior to joining The Chronicle in 2023, she reported on San Francisco’s changing real estate and economic landscape in the wake of the COVID-19 pandemic for the San Francisco Business Times.
Waxmann was born and raised in Frankfurt, Germany, but has called San Francisco home since 2007. She’s reported on a variety of topics including housing, homelessness, education and local politics for the San Francisco Examiner, Mission Local and El Tecolote.
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This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
Construction work is seen in progress in 2023 at 550 Terry Francois Blvd. in San Francisco, where OpenAI will expand its office space.
Artificial intelligence giant OpenAI has signed off on a second major expansion in San Francisco, in another lift for the city’s beleaguered office market.
The company has finalized a 315,000-square-foot lease at 550 Terry Francois Blvd. in Mission Bay, according to a real estate market participant with direct knowledge of the deal who confirmed it Friday.
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The location is just a block from OpenAI’s blockbuster 486,600-square-foot sublease from Uber at 1455 Third St. and 1515 Third St., signed last October. OpenAI’s new deal is the city’s largest office lease of 2024 and largest since last year’s expansion.
OpenAI and DivcoWest did not respond to inquiries from the Chronicle. Raise Commercial Real Estate, which represented OpenAI in the lease deal, also did not return messages seeking comment.The San Francisco Business Times first reported that the pending deal had closed Friday.
The Chronicle reported in April that OpenAI, the San Francisco company that is best known for developing chatbot ChatGPT and has been growing rapidly in the city over the past year, was in talks to expand its footprint at 550 Terry Francois — Old Navy’s former six-story headquarters in Mission Bay — despite rumors that the company might expand into the rest of Uber’s four-building campus in the neighborhood.
One market insider told the Chronicle that OpenAI has also been actively searching for space in other markets: the company reportedly is seeking a 200,000-square-foot office space in New York City and a 50,000-square-foot office in Seattle.
San Francisco continues to be the epicenter of the AI boom, with the highest share of venture funding of any region.
Advertisement
Article continues below this ad
But the sector’s growth has not offset major office space cutbacks during the pandemic. San Francisco’s office vacancy rate was a record 36.6% in the second quarter of the year, according to brokerage CBRE.
OpenAI’s growth shows continued tech interest in the Mission Bay neighborhood, where office vacancy has exploded during the pandemic as firms reduced their footprints: Dropbox has given up or subleased more than 40% of its originally 750,000-square-foot headquarters. Uber never occupied around half of its headquarters, which is now being subleased to OpenAI.
That coincides with a downturn in the biotech industry, which has seen numerous layoffs in the past two years. The area had previously morphed into a hotbed for the biotech industry, housing companies such as FibroGen and Nektar Therapeutics, and boasted a 1% vacancy rate as recently as 2021.
Reach Roland Li: roland.li@sfchronicle.com; Twitter: @rolandlisf. Reach Laura Waxmann: laura.waxmann@sfchronicle.com
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Roland Li covers commercial real estate for the business desk, focusing on the Bay Area office and retail sectors.
He was previously a reporter at San Francisco Business Times, where he won one award from the California News Publishers Association and three from the National Association of Real Estate Editors.
He is the author of “Good Luck Have Fun: The Rise of eSports,” a 2016 book on the history of the competitive video game industry. Before moving to the Bay Area in 2015, he studied and worked in New York. He freelanced for the Wall Street Journal, the New York Times and other local publications. His hobbies include swimming and urban photography.
Laura Waxmann covers the business community with a focus on commercial real estate, development, retail and the future of San Francisco’s downtown. Prior to joining The Chronicle in 2023, she reported on San Francisco’s changing real estate and economic landscape in the wake of the COVID-19 pandemic for the San Francisco Business Times.
Waxmann was born and raised in Frankfurt, Germany, but has called San Francisco home since 2007. She’s reported on a variety of topics including housing, homelessness, education and local politics for the San Francisco Examiner, Mission Local and El Tecolote.
About
Contact
Services
Account
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
