OpenAI Inks Another Mission Bay Lease

The ink has dried on OpenAI’s latest expansion in San Francisco.

The artificial intelligence behemoth and creator of ChatGPT signed a deal to sublease approximately 280,000 square feet of office space at the former Dropbox headquarters complex in Mission Bay, the San Francisco Chronicle reported. The firm had reportedly been looking at that space at 1800 Owens Street, known as the Exchange, earlier this year. Confirmation of the lease signing came from a March market report from Newmark, according to the Chronicle.

With the deal for its third Mission Bay expansion complete, OpenAI’s total office footprint in the city now exceeds 1 million square feet, all of which is concentrated in Mission Bay. The Sam Altman-led company in recent years has subleased two buildings from Uber at 1455 and 1515 Third Street along with another lease from Gap Incorporated for a six-story office building at 550 Terry Francois Boulevard.

The 1800 Owens complex totals roughly 750,000 square feet and is located about a half-mile from OpenAI’s current San Francisco offices. Dropbox previously occupied the entire building but has been trimming its presence since the pandemic, subleasing out most of the space to a handful of tenants in recent years. Dropbox is now planning to vacate the building entirely, the San Francisco Business Times reported.

OpenAI has been in growth mode in the Bay Area outside of San Francisco. Last month, the ChatGPT maker signed a lease for 450,000 square feet at an office complex in Mountain View, the San Francisco Chronicle reported.

Its presence in the South Bay city is already leading housing developers into action given the City of Mountain View’s designation of the East Whisman district as a prime housing development area that could receive as many as 5,000 new housing units. In a market in need of housing but with few investors willing to sink into new construction, office-to-residential conversion projects, including efforts from Essex Property Trust and Prometheus Real Estate Group, are currently the prevailing housing development option.

— Chris Malone Méndez