Head any direction from the transit stop at Montgomery and Market Streets, and San Francisco reveals itself as a city still in recovery.
Market Street is full of empty storefronts, none larger than the San Francisco Centre mall. The South of Market neighborhood, SoMa, which once pumped the city’s lifeblood of tech start-ups and venture capital firms has over a 40 percent office vacancy rate — among the highest. To the north, the city’s Financial District produces a faint hum compared to 2019, when twice as many workers, residents and tourists were on the streets.
But up Montgomery, past the WeWork towers and across Washington Street from the Transamerica Pyramid, a different atmosphere sets in. The buildings shift from concrete skyscrapers to old brick-and-timber low-rises. A line forms outside French café Maison Nico. The power-lunch crowd fills tables at Cotogna, sister operation to three-Michelin-star Quince next door. Jony Ive, the famous iPhone designer, is building a creative campus on a handful of properties he’s amassed since 2020, paying $138 million. Shoppers shuttle in and out of high-end retailers, such as Ralph Lauren and Paul Smith. Venture capital and artificial-intelligence firms lease much of the office space: Anthropic had its office here before growing out of its space, and OpenAI gained a foothold when it bought one of Ive’s companies. Bain Capital Ventures and Thrive Capital are two of at least 13 venture capital firms in the neighborhood.
Welcome to Jackson Square.
“It’s just, like, the vibiest neighborhood in the city at this point,” Charlie Cutler, a partner at local brokerage firm CalCo, said of the roughly two-square-block area. “It’s like the SoHo of SF. If you’re a fast-growing company that needs a super sick headquarters, Jackson Square is one of the neighborhoods you look at.”
As San Francisco desperately tries to find its footing six years after pandemic shutdowns, its oldest business district has surprisingly come alive faster than the rest of downtown, thanks to a geographic reshuffling of the city’s tech ecosystem and commuting patterns, the natural co-locating of startups and the firms that fund them and a shift in where top tech founders prefer to work.
Despite San Francisco’s roaring tech economy, one-third of its office space still sits empty. In Jackson Square, the vacancy rate is 18.5 percent, down from 29 percent in 2021, according to CBRE, though local boutique brokers estimate it’s even lower. With its comeback, the neighborhood, which for the last few decades was home to the city’s high-end design firms, has disrupted the belief that it takes a modern building with top-tier views and amenities for companies to lure employees back to the office. Instead, it’s 100-year-old low-rises rapidly leasing and commanding some of the city’s highest rents. Jackson Square has seen leases between $100 to $140 per square foot — on par with the newer and sleeker Mission Bay — while asking rents in SoMa sit around $66 per square foot.
But the ascent has limits. Despite the relatively full buildings, Jackson Square is still not where it was before 2020, when vacancy was below 2 percent. Its historic status means few demolitions and new starts. And not all who want in can get in. Small floorplates determine what kind of companies can stick around and some have already gotten sized or priced out — though this overflow could help nearby neighborhoods get back to normal.
“The shiny thing”
The city’s first central business district, Jackson Square has hosted gold exchanges, old brick saloons and a famous red light district.
Sources attribute the neighborhood’s evolution into a niche hub for artificial intelligence, in part, to the fall of SoMa.
Before the work-from-home policies of 2020, SoMa was the place to be. Abundant, open-floorplan office space worked in harmony with a relatively healthy supply of nearby housing. Venture capital firms, many of which were headquartered in San Jose or the Peninsula, opened offices in SoMa and South Park for proximity to their startup portfolio firms. The nearby Caltrain line made for an easy commute from the south.
After workers were sent home, proximity to public transportation didn’t matter as much. And when they trickled back, employees and founders increasingly chose to drive. A doom loop ensued, as slow foot traffic led to restaurants and retail shuttering, vibrancy waned and residents, as well the venture capital and tech startup companies, moved out.
“People want to be near the money. Everyone wants to be close to the shiny thing.”
The artificial intelligence boom, paired with the return of office culture, reopened the dam of workers coming back into a city. But they didn’t go back to SoMa, repelled by traffic and empty streets. Increasingly, founders set up in Jackson Square, whose location allows commuters from Marin, Pacific Heights and the Marina, to skip the gridlock to the south.
Two moments in the turnaround stand out to Robbie Silver, CEO of the nonprofit Downtown SF Partnership since 2020.
First, a $1 billion investment into the Transamerica Pyramid — just south of the neighborhood — by a group including German pension funds and New York developer Michael Shvo sent renewed optimism through the area. (The embattled Shvo and the German pension fund have since sold the pyramid to a Cypriot investment firm for about $700 million.) About the same time, Ive launched his spending spree, grabbing more than $100 million of Jackson Square commercial space — a large chunk from local behind-the-scenes politico Clint Reilly.
Ive’s company, LoveFrom, counts Apple and OpenAI as clients. Another of Ive’s businesses, an artificial intelligence hardware outfit called Io, merged with OpenAI last spring.
Dominic Morbidelli, an agent from Maven, said Jackson Square’s appeal works off the same recipe that made SoMa what it was.
“People want to be near the money,” Morbidelli said. “Everyone wants to be close to the shiny thing.”
Flying off the shelf
Jackson Square’s narrow streets and low brick-and-timber buildings feel like an escape from the towering concrete and glass of the adjacent Financial District. Or, as Claude Imbault, economic development manager for the Downtown San Francisco Partnership, likes to say, Jackson Square feels as if “Georgetown and SoHo had a child.”
Yet, that quaint quality, unique in San Francisco, puts a ceiling on its potential, especially when catering to an industry where employee count can soar fast. Anthropic, the AI company whose chatbot is Claude, began in a 7,000-square-foot office in Jackson Square in 2021, but when it sought to expand, it took a building in the Financial District. A similar situation unfolded with AI analytics start-up Hex, and Snap Inc. and video game developer Supercell each recently looked in the neighborhood but couldn’t find a large enough space and ended up a few blocks away in North Waterfront, according to Tom Doupe, a broker with JLL.
Doupe said in the world of rapid AI fortunes, more landlords are pumping money into tenant improvements to make their spaces move-in ready. Such spaces often get leased before the renovation is even complete, other brokers added.
“I had an AI company that got a round of funding and wanted to move into a space within 24 hours,” Doupe said. “The quickest time to usually do that is a month or two. But if you … have 5,000 square feet, an open-floor plan [that] was recently renovated and has furniture, that’s going to fly off the shelf with a seed-funded AI company or VC firm.”
In 2023, AJ Asver, CEO of Grep.ai, signed a two-year lease for an 1,800-
square-foot office in Jackson Square for “roughly $35 per square foot,” he said.
The neighborhood then “felt like a secret.”
It was also convenient: The lead firm funding his project was a block away. Yet as he built Grep.ai, he watched Jackson Square get discovered. Asver’s desk lunches soon turned into $30 affairs, and by the time the lease was up, the landlord was seeking an increase of nearly 30 percent. According to Colliers, the average asking price for at the end of 2025 was just under $54 per square foot, but brokers on the ground say they’re often seeing between $80 and $120.
Asver eventually took his company to the Financial District, where he signed a shorter lease for a smaller office at roughly the same rate he originally paid in Jackson Square.
“I love Jackson Square as a neighborhood, but moving there as a startup in 2023 made a lot more sense than moving there now,” Asver said. “Unless you just raised a very large seed round and you decide you want a really nice office.”