The lease on 888 Brannan was slated to expire next year, the last building in Airbnb’s once sprawling Showplace Square campus, which prior to the pandemic spanned five buildings. The company, which embraced remote work two years ago, has been steadily shrinking its footprint at the HQ complex.
In a statement, the company said the lease renewal represents a “commitment to our hometown.” Airbnb said it still requires the Brannan Street space to bring employees “together intentionally,” adding that the location will play a critical role in fostering in-person collaboration.
In May, Scale AI, a San Francisco-based artificial intelligence data-scaling firm, inked a deal to sublease 180K SF from Airbnb at 650 Townsend Street in Showplace Square.
The generative AI tech boom is fueling hope that two trends that have defined San Francisco’s office sector since the beginning of the pandemic—rising vacancy rates and negative net absorption—soon may shift in a positive direction.
While overall net absorption of San Francisco offices remained negative in Q3 2024, the total of minus 105,587K SF was the smallest occupancy loss since 2019, CBRE reported. The overall office vacancy and availability rates in San Francisco, while still at record highs of 36.9% and 39.1%, respectively, appear to be leveling off.
CBRE anticipates that annual office leasing activity in San Francisco this year will exceed 7M SF for the first time since 2019. “The elevated leasing activity combined with the slowdown in new spaces added to the market will stabilize the market-wide vacancy rate,” CBRE said.
The leading edge of the San Francisco office recovery is in the Mission Bay/China Basin submarket, which experienced positive net absorption totaling 431K SF in the third quarter.
Last month, ChatGPT maker OpenAI inked a deal for a 315K SF building at 550 Terry A. Francois Boulevard, the largest office lease of the year thus far in San Francisco. The property in Mission Bay is less than a block away from where OpenAI is subleasing 485K SF from Uber, last year’s largest lease transaction.
While the generative AI boom is driving tenant requirements in San Francisco’s office market, other tech players as well as financial services firms continue to right-size their footprints in the city.
JPMorgan Chase is planning to vacate about 244K SF of First Republic Bank’s former office space at One Front Street, reducing its footprint in the downtown office tower by close to 70%, the San Francisco Business Times reported.
JP Morgan’s lease at One Front, one of three First Republic leases JP Morgan assumed when it acquired the struggling bank last year, expires in June 2025.
Earlier this year, Google confirmed it will not renew its lease for about 320K SF at One Market, a 1.6M SF office complex on the Embarcadero. The lease expires in April 2025.
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