AI Firm Leases 70,000 More Square Feet in San Francisco

Another artificial intelligence company is growing in San Francisco.

AI tools company LangChain grabbed 70,000 square feet of offices at 303 Second Street in South of Market, subleasing space from Sony Interactive Entertainment, the San Francisco Business Times reported. LangChain’s new lease comes about a year after it moved into an 11,800-square-foot office two blocks away at 501 Second Street.

LangChain’s new digs are in a 785,000-square-foot office structure with notable tech tenants like Reddit and DoorDash also in the building. Los Angeles-based Kilroy Realty purchased the building in 2010 for $233.3 million. As of March, the building was 66.1 percent occupied, according to documents filed with the Securities and Exchange Commission.

Sony PlayStation signed a lease for 130,000 square feet across three floors in the building in 2019. LangChain’s sublease deal includes two of the three floors occupied by Sony. Parent company Sony Group Corporation leases 131,642 square feet of space in Kilroy properties across the Bay Area and Greater Los Angeles, per SEC filings cited by the Business Times. Other Kilroy properties in the region include South San Francisco’s Oyster Point as well as San Francisco’s 100 First Street, 100 Hooper Street, 201 Third Street and 350 Mission Street.

AI companies both big and small have been key drivers of demand for office space in San Francisco and beyond. Tenant requirements are up to about 9.7 million square feet, up 50 percent from a year ago, according to Newmark data cited by the Business Times. Tech firms make up roughly half of that demand; of that, AI companies alone make up roughly a quarter. Demand has effectively bounced back to 2018 levels, JLL’s Alexander Quinn told the Business Times. The city’s shift from “recovery mode” to “heating up” has begun, Quinn said.

AI giants like OpenAI and Anthropic have been leading the charge, with both companies surpassing 1 million square feet of office space in San Francisco earlier this spring. In recent months, smaller AI outfits such as Together, Flux, Zyphra, Harvey and Reflection have leased tens of thousands of square feet across the city, usually growing their footprints by significant amounts each time.

— Chris Malone Méndez