REPORT: OpenAI Searching For More Office Space In Mission Bay

OpenAI, developer of Chat GPT, may be in the market for additional office space in San Francisco’s Mission Bay neighborhood, according to the San Francisco Chronicle.

An unidentified source told the Chronicle that OpenAI recently toured Old Navy’s former headquarters, a six-story, 315K SF office building at 550 Terry Francois Blvd. The office is across the street from two buildings OpenAI subleases from Uber, 1455 and 1515 Third St. In October 2023, OpenAI finalized a sublease for 486K SF of office space with the ride-sharing company.

550 Terry Francois “represents a logical expansion for OpenAI, as it sits adjacent to Uber’s headquarters,” the Chronicle reported.

Bisnow reached out to executives at Raise Commercial Real Estate, the company representing OpenAI’s brokerage requirements in the Bay Area, but did not receive an immediate response.

DivcoWest, owner of 550 Terry Francois Blvd., also did not respond to requests for comment.

In addition to OpenAI, more than six other AI firms signed leases in San Francisco in 2023, according to CoStar. Many of these firms are opting for the nearly 13M SF of office sublease space on the market, which may bolster a deteriorating office market.

Office vacancy rates in the city exceeded 36% as of the first quarter, according to preliminary data from CBRE.

AI companies are part of a small slice of the tech industry still signing leases in San Francisco, causing them to be viewed by some as a potential savior of the city's struggling downtown.

Leasing activity on the part of AI companies indicates that an “economic rebound is beginning to gain steam” in San Francisco, CoStar said.

OpenAI’s 486K SF sublease with Uber totaled 40K SF more than the company originally planned and made it the biggest lease signed in San Francisco since 2018 when Meta assumed 756K SF at 250 Howard St.