Another artificial intelligence-backed tenant is adding to the great AI lease-up of San Francisco.
Fintech firm Brex signed a full-building, 200,000-square-foot lease for 270 Brannan Street, the San Francisco Chronicle reported. The deal was negotiated by JLL’s Charlie Hanafin, Chris Roeder and Jak Churton on behalf of landlord Mitsui Fudosan America.
Brex’s new lease more than triples the amount of office space it once held. It abandoned its Financial District headquarters in 2021 for a remote-first work setup but returned to San Francisco last year with a roughly 100,000-square-foot lease at the 270 Brannan building. Now, with 200,000 square feet under its belt, Brex boasts more than three times the amount of office space it held when it left San Francisco five years ago.
The company was acquired by Capital One in April and has expanded into being a financial platform for managing expenses, payments and other business operations. The AI boom’s push on housing and office demand in San Francisco and across the Bay Area fueled Brex’s decision to grow.
“We look at the momentum building around AI and see a city entering its best years yet, and we’re planting ourselves right in the middle of that,” company President Ben Gammell said of the lease deal.
The second quarter of this year was the seventh consecutive quarter of positive net absorption in San Francisco, according to CBRE. AI startups accounted for about one-third of all leasing activity in the city, grabbing nearly 1 million square feet as leasing activity totaled 3 million square feet.
Leasing activity has told a tale of two cities depending on the neighborhood. AI companies were responsible for much of the lease deals in neighborhoods like China Basin and Mission Bay, the latter being home to OpenAI, which registered the lowest office vacancy of any submarket at 17 percent. Vacancy in the Yerba Buena area, meanwhile, was highest at 62.7 percent.
As in Silicon Valley, many firms are seeking top-tier office space in San Francisco rather than older buildings. Class A buildings accounted for 77 percent of leasing activity in the second quarter. The 270 Brannan Street building was erected in the South Beach neighborhood, near OpenAI’s headquarters, a decade ago.
— Chris Malone Méndez
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