OpenAI hunts for new offices in San Francisco’s Mission Bay

The future for artificial intelligence may seem boundless — but does that extend to the office footprint for OpenAI?

After subleasing 486,600 square feet of offices from Uber last fall, the creator of ChatGPT is on the hunt for more at 550 Terry Francois Boulevard, in Mission Bay, the San Francisco Chronicle reported, citing unidentified sources.

The question is: How many more offices does the artificial intelligence startup need? Real estate sources say OpenAI is looking to expand its offices by 400,000 square feet, and has considered Silicon Valley locations.

While the fast-growing tech firm doesn’t appear to want to grow its footprint at 1455 and 1515 Third Street, where it subleases two of Uber’s campus buildings, it could set up shop nearby.

OpenAI has charted a course for Old Navy’s former headquarters at 550 Terry Francois Boulevard, according to the Chronicle, with one source confirming the firm has toured the building owned by DivcoWest. 

The six-story, 315,000-square-foot building represents a “logical expansion for OpenAI,” as it sits adjacent to Uber’s headquarters, according to the newspaper. The building now sits empty.

OpenAI didn’t immediately respond to a request for comment, while DivcoWest, a unit of San Francisco-based DivCore Capital, declined to comment. 

A representative of Raise Commercial Real Estate, the brokerage representing OpenAI, neither confirmed nor denied potential negotiations between both parties.

The Golden State Warriors has also expressed interest in the building, according to the San Francisco Business Times.

DivcoWest bought the former Old Navy hub in 2022 for $356 million, or $1,130 per square foot, with plans to revamp the building for life science tenants.

Since then, demand for Mission Bay research labs has cooled, with vacancy hitting 14.6 percent last summer, according to JLL. Overall office vacancy in San Francisco is now 36.6 percent, following a broad shift to remote work.

San Francisco Mayor London Breed dubbed her city “the AI capital of the world,” after AI firms leased dozens of offices in  the Financial District, South Beach, South of Market and on the edge of the Mission District.

Later San Jose Mayor Matt Mahan mounted a challenge to that claim, urging city agencies to roll out a welcome mat for AI firms. Last year, Silicon Valley accounted for more than half of artificial intelligence tenant demand across the Bay Area, according to Cushman & Wakefield.

— Dana Bartholomew

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