AI Firm Puts HQ in San Francisco's Financial District

Landlords who are hoping the artificial intelligence boom in San Francisco will be pervasive enough to lift the ailing downtown office sector got a shot in the arm this week with news that an AI firm is moving its headquarters into an historic building in the Financial District.

San Francisco-based Notion has inked a long-term deal for 105K SF in the Monadnock Building at 685 Market Street, a Beaux Arts landmark that dates back to 1907.

The company, which launched an AI-powered assistant last year, will exit its 65K SF HQ in the Mission District and move into five floors of the 10-story building in a lease that runs until 2034 and includes options to expand within the building, the San Francisco Chronicle reported.

With the exception of its ground-floor storefronts, the Monadnock Building has been largely empty since Uber listed it for sublease in 2019. A JLL team represented building owner Brookfield Properties in the lease deal, while a CBRE team represented Notion, the report said.

The building that will be Notion’s new home is located in proximity to where the Financial District meets Union Square, a hopeful sign that the tech boom unfolding in Mission Bay is spreading to neighborhoods most impacted by the hollowing out of San Francisco’s downtown as remote work was embraced during the pandemic.

Artificial intelligence firms have been driving leasing volume in San Francisco, which still is afflicted with an overall office vacancy rate of close to 37%. More than 30M SF of office space currently is available to rent in the city.

In the past two years, AI companies have signed office leases encompassing more than 1.7M SF in the city, led by some of the largest players in generative AI.

Last year, ChatGPT pioneer OpenAI subleased 486K SF of office space in two buildings at Uber’s Mission Bay headquarters campus, the largest office lease in the city in 2023.

In September, OpenAI doubled down on its office footprint with the largest office deal thus far this year: a 315K SF building at 550 Terry A. Francois Boulevard, a property in Mission Bay less than a block away from the Uber campus.

OpenAI competitor Anthropic last year inked a deal to sublease Slack’s 230K SF HQ in the Transbay neighborhood. In May, ScaleAI, an AI data-scaling company, subleased 180K SF from Airbnb in Showplace Square.

JLL is projecting that AI companies are on track to occupy up to 12M SF of offices in San Francisco by 2030, according to a report in the San Francisco Standard.