Snowflake Seeks Collaborators in New AI Lab Space

While some artificial intelligence and tech firms in the Bay Area are looking to claw above each other for the top spot, Snowflake is instead reaching its arms out sideways.

The cloud data platform just revamped the top floor of its Menlo Park headquarters into the all-new “Silicon Valley AI Hub,” a 30,000-square-foot space meant to act as a meeting place and water cooler for some of the booming sector’s emerging unicorns. Case in point: One of the first events held in the new space gathered executives from OpenAI, Windsurf and Glean to share their wisdom on launching an AI startup.

An inaugural class of 13 startups will set up shop at the hub over the course of three months, gaining access to coworking space, professional video studios and snacks as well as Snowflake’s computing infrastructure and the company’s investor network. The goal is to host up to 10 events a week at the AI hub, including networking dinners, hackathons and educational sessions. An expansion to add a rooftop restaurant and bar is slated for next year.

In the years since the public release of OpenAI’s ChatGPT in 2022, Snowflake has been beefing up its artificial intelligence capabilities, as well as its own business operations, growing its headcount from 1,000 to 8,000 in the five years since its 2020 IPO and subleasing 773,000-square-foot from Meta last year.

Snowflake has partnered in the past with OpenAI and Anthropic to integrate their language models in its products. But the new AI hub marks a new chapter for collaboration in the booming sector — not just between Snowflake and AI companies, but among those specialty AI firms themselves.

The move comes as other AI firms across the region also beef up their operations in terms of headcount and office square footage.

Databricks — Snowflake’s most direct competitor — snagged an additional 305,000 square feet in Sunnyvale in July. OpenAI and Anthropic have been on similar tears in San Francisco. OpenAI occupies approximately 1 million square feet of offices and vowed at the grand opening of its Mission Bay headquarters in March that it plans to double its headcount of 2,000 San Francisco-based employees. Anthropic last month added another 100,000 square feet to its headquarters footprint. And AI-powered software company Postman opened a new 32,367-square-foot headquarters in the Financial District over the summer.

The AI sector is driving office demand in the Bay Area as the region stumbles toward post-pandemic recovery. As of last month, office lease demand in San Francisco was up 107 percent year-over-year, according to a recent VTS report. Office demand in the city was up more than 350 percent since ChatGPT was first released to the public in late 2022.

Over the next five years, San Francisco and the Bay Area could see as many as 50,000 to 60,000 new workers in the AI sector move in, experts at CBRE predict. To accommodate them, AI firms are expected to grow their office footprints from 5 million square feet to more than 20 million.

San Jose site trades

In more AI-related news, a Goodman Group affiliate bought land in north San Jose proposed for a data center, a hot asset class thanks to the demand for space to store computer processing units as AI proliferates. The deal with LBA Realty came with a $200 million price tag. The all-cash deal for 350 and 370 West Trimble Road includes 46.8 acres currently housing an office complex and adjacent vacant land. Earlier this year, LBA submitted a development permit to the city of San Jose to build a 207,950-square-foot data center on the site; Goodman Group is known for its work with data centers around the world.

Elsewhere in San Jose, a plot of land in downtown sandwiched between the convention center and Children’s Discovery Museum sold to the city for $13.5 million. BXP offloaded the 3.6-acre parking lot property after plans to build a tech campus complete with offices, retail and housing.

A spooky buy

Scared by the idea of buying a haunted hotel at a bargain-basement price?

Don’t be–hotels across the Bay Area have been selling at steep discounts in recent years amid a wave of loan defaults, foreclosures and other financial woes.

There was, however, something unique about the latest deal, which saw Hotel Union Square go at bargain. While it was one of several hotels used as temporary shelter during the pandemic, it was just one of two that never reopened its doors to the public afterward.

That likely helped investor Mahmood Alam snap up the 131 room property for $30 million, a discount of more than a third on the 131-room property at 100-120 Powell Street street.

The hotel comes with more than 100 years of history, including the purported ghost of playwright Lillian Hellman, who had frequent dalliances with author Dashiell Hammett in Room 207 during the Prohibition era. In recent years, it operated as temporary residences for the homeless in 2020 and 2021. Rockpoint Group defaulted on its mortgage in 2023 and managers Rockpoint and Highgate Hotels have been searching for a buyer ever since.

Redco adds another trophy to mantle

The sale of Wells Fargo’s headquarters in downtown San Francisco is finally complete.

Redco Development closed its purchase of 420 Montgomery Street for $55 million — more than 85 percent below the building’s pre-pandemic value of $370 million. The offices are mostly vacant after Wells Fargo decamped much of its operations to a 620,000-square-foot lease at 333 Market Street last year.

Redco was able to move in after housing developer Forge Development Partners got close to buying 420 Montgomery Street for a similar price with plans to convert the building into housing, with the plans ultimately falling apart.

Redco plans to rebrand the iconic office building as “450 California,” complete with a revamped public-facing lobby with food and beverage tenants including a coffee shop, bar and restaurant. Underground, Redco plans to convert the former bank vault into a speakeasy bar, fitness center, bowling alley and other amenities, while the developer is hoping to bring in a single tenant to lease the upper four floors, including the penthouse.

Redco now owns nearly two blocks on the California Street corridor after buying 400 Montgomery Street next door to the Wells Fargo building for $25 million and 300 California Street for $28.5 million last year.

Mattson’s lending accomplice under microscope

One of Ken Mattson’s lending partners is in the crosshairs of his victims.

Victims of the disgraced Sonoma developer-turned-alleged-fraudster have trained their sights on Socotra Capital, the Sacramento-based firm that provided Mattson’s businesses with more than 100 loans totaling more than $180 million. Socotra holds liens on 75 properties linked to Mattson.

Defrauded investors haven’t filed a lawsuit against the lender directly — yet.

Matt Treger, who claims to have gotten scammed after investing with Mattson over 15 years, cites Scotra’s own website as a red flag.

“From Socotra’s website, they proclaim, ‘We’re not like your conventional lenders with strict parameters, slow turnarounds, and unnecessary hoops to jump through,’” Matt Treger, who invested with Mattson over more than 15 years, told the Press Democrat. “As someone whose life savings has been swallowed up, their business model seems clear evidence that parameters and hoops are an essential part of a just system.”

“My hope is that, as an investor group, we pursue every avenue to determine accountability and recompense,” Treger added.

The latest accusations against Socotra come a month after Mattson, out on $4 million bail, crashed his car into a fence and tree in Sonoma. The Press Democrat reported this week that he was unconscious when authorities arrived on the scene. Notably, in the year leading up to his arrest, Mattson reportedly sold off 40 classic cars to the tune of nearly $3 million, though his lawyers pleaded this summer for relief from selling off additional other vehicles.