This Week's Bay Area Deal Sheet
OpenAI is betting big on San Francisco.
The company signed another lease in the city, this time for the entire 315K SF 550 Terry Francois Blvd. in Mission Bay, according to the San Francisco Business Times.
The six-story property was once the headquarters of fashion retailer Old Navy.
Last year, the artificial intelligence giant closed the largest leasing transaction of 2023 when it subleased 486K SF in two Mission Bay buildings, 1455 and 1515 Third St. 550 Terry Francois Blvd. is about a half block from these properties.
Bisnow reported Thursday that San Francisco's office vacancy rose slightly to 37.3% based on CBRE preliminary third-quarter figures. However, artificial intelligence firms were responsible for 15% of the leasing activity in Q3.
SALES
Chicago-based Waterton has grown its portfolio in San Francisco with the acquisition of L Seven, a 410-unit apartment complex at 1222 Harrison St. L Seven includes seven six-story buildings in SoMa.
Waterton plans to upgrade the property’s amenity spaces, according to a press release. This week, Waterton closed a $1.7B fund aimed at multifamily acquisitions.
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The RMR Group of Newtown, Massachusetts, sold a 64K SF research and development building in San Jose to an undisclosed buyer for $10.8M. CBRE represented the seller.
The single-story building at 3939 N. First St. includes extensive lab infrastructure and 3000 amps of power, ideal for a tech or life sciences tenant.
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Pleasanton Gravel Co. sold a 41-acre industrial site in Livermore to Torrance-based developer Overton Moore Properties and Invesco Real Estate for an undisclosed amount. OMP plans to begin construction on a two-building, 760K SF advanced manufacturing facility this month that is 60% pre-leased to Lam Research.
Colliers negotiated the sale and will handle leasing for the ownership. Newmark represented Lam.
A third building encompassing 288.7K SF will be available for lease in Q3 2025. Delivery of the entire project is slated for next year.
DEVELOPMENTS
The San Francisco Planning Commission unanimously approved the creation of a special-use district to build 175 units of fully affordable senior housing at 772 Pacific Ave. in Chinatown. Proposed plans call for the 148.4K SF asset to include 13.5K SF for a ground-level banquet hall and 3.3K SF of open space.
Under the state density bonus law, which makes exceptions to neighborhood height and bulk restrictions if a project is within a half-mile of a transit center, the Chinatown Community Development Center will be able to build the 155-foot tall tower. By law, all of the units must be affordable and at least one person in each household must be 62 or older.
