Story Highlights
- Alexandria seeks approval to convert 518,000 square feet to offices.
- OpenAI nears 150,000-square-foot lease at 455 Mission Bay.
- Mission Bay emerges as San Francisco's office revival engine.
The AI boom is reshaping Mission Bay.
Alexandria Real Estate Equities is seeking city approval to convert more of its lab buildings within the district into offices to meet surging demand from artificial intelligence firms. The request goes before San Francisco’s Planning Commission on Thursday.
The developer wants to designate an additional 518,000 square feet for office tenants across four properties — 455 Mission Bay Blvd. South, 1450 Owens St., 1500 Owens St., and 1700 Owens St. The change would expand how much office space can be leased within Alexandria’s Mission Bay Life Sciences and Technology District, created in 2008 to anchor a biotech boom.
The move comes as OpenAI closes in on a roughly 150,000-square-foot lease at 455 Mission Bay, according to a person familiar with the negotiations. The San Francisco Chronicle first reported the talks involving the company’s nonprofit arm.
Mission Bay's transformation
Once a collection of idle railyards, Mission Bay is emerging as the engine of San Francisco’s office revival. No other part of the city has seen empty offices fill up faster in the past two years than the 300-acre waterfront neighborhood where OpenAI maintains its hub.
Availability — a measure of space that is vacant or soon to hit the market — has plunged 46% in Mission Bay, according to Avison Young.
Alexandria’s pivot underscores how AI tenants are reshaping the district — and, increasingly, San Francisco’s innovation economy. Joel Marcus, Alexandria’s founder and executive chairman, told the Business Times Monday the AI demand has been strong and now makes up an important part of the city’s future tech base.
Alexandria’s original authorization in the district allowed over 1 million square feet of office use. Nearly all of that space is now leased, according to planning commission documents.
Under a 2008 agreement, once all previously approved office space was leased, Alexandria could seek more — up to its full 2.7 million square feet of total entitlement. The company’s current request for 518,000 square feet is part of that process, a reallocation of existing space under the city’s office cap rules.
San Francisco's Planning Department has given a preliminary recommendation to approve the request.
CBRE Investment Management, through a joint venture with Alexandria, now holds a 75% stake in five Mission Bay life science buildings including 455 Mission. Alexandria retains minority interests and remains the operating partner.
