Poster child for the global artificial intelligence boom, we got this company called OpenAI that’s making some serious moves. They’re about to score a massive office lease in San Francisco, and we’re talking about a whopping 445,000 square feet. That’s no joke, folks. It’s gonna be the biggest office deal in the city since 2018, and that’s saying something.
Now, here’s the scoop. OpenAI might just sign a sublease with Uber, of all companies. Yeah, you heard me right. They’re eyeing Uber’s Mission Bay headquarters, and word on the street is that this deal could go down in a matter of weeks. Three real estate sources have confirmed this juicy information, so you know it’s legit.
If this sublease goes through, OpenAI is gonna have some serious room to grow. I’m talking about space for over 2,000 employees. That’s a major boost for a city that’s been hit hard by the pandemic. San Francisco’s office market has been struggling, with a record-high vacancy rate of 34% in September. Ouch. But hey, this deal might just turn things around.
We reached out to OpenAI for a comment, but no response yet. And Uber? Well, they ain’t saying anything either. Guess they’re keeping their lips sealed for now.
But here’s the thing, folks. This sublease deal ain’t a done deal just yet. It’s gotta get the approval from a bunch of different landlords, including Uber, Alexandria Real Estate Equities, and even the Golden State Warriors. Yeah, they’re in the mix too. So, don’t get too excited just yet. This thing could take a few more weeks to finalize.
Oh, and by the way, these two buildings that OpenAI is eyeing? They’re part of this fancy office complex that was built right next to Chase Center. Uber snatched up all 1 million square feet of office space back in 2017, thinking they’d need it for their global headquarters. But guess what? The pandemic changed their plans, and now they’re looking to sublease some of that space. They’re still paying rent at their old HQ, but no luck finding a subtenant for that one.
Alright, let’s talk about the impact of this potential deal. If OpenAI seals the deal, it’s gonna be the biggest thing to happen to the market in years. That’s what experts are saying, folks. Derek Daniels from Colliers, a real estate brokerage, called it the “most impactful single deal” in recent memory. That’s some serious praise right there.
But wait, there’s more. Another AI company called Anthropic has made a major move too. They signed a lease for 250,000 square feet in the former Slack headquarters. Sources say the sublease deal is expected to be approved in the next couple of weeks. This AI wave is taking over, my friends.
Now, let’s talk money. OpenAI and Anthropic have both raised billions of dollars to take their companies to the next level. Just a couple of weeks ago, Amazon invested a cool $4 billion in Anthropic. And remember Microsoft? Yeah, they dropped a massive $10 billion investment into OpenAI earlier this year. These companies mean business, folks.
Now, let’s not forget some other big players in the office lease game. Back in 2018, Facebook (now Meta) snagged a whopping 755,900 square feet at Park Tower, creating the largest single office lease in the city’s history. Meta has since ditched their offices, but they found a small-time tenant for a part of that space. And Pinterest? Well, they signed a lease for 490,000 square feet at 88 Bluxome St. in 2019, but they ended up canceling it last year. Things don’t always go as planned, folks.
Alright, let’s wrap this up. OpenAI currently rocks 40,000 square feet at 3180 18th St. and 100,000 square feet at 575 Florida St. But if this deal with Uber goes through, they’ll be saying goodbye to those spaces. And guess what? That means more empty offices in the city. The vacancy rate ain’t looking too good, my friends.
But hey, these AI deals might just be the boost that San Francisco needs. They may not solve the whole vacancy problem, but they’re definitely creating some positive momentum. And who knows, maybe other tech and non-tech tenants will start rethinking their space needs in the market.
This is Roland Li reporting for the SF Chronicle. Catch me on Twitter @rolandlisf. And if you wanna reach Laura Waxmann, shoot her an email at email@example.com. Stay tuned for more office lease drama, folks!