AI Startups Revitalize San Francisco’s Northern Waterfront
The Northern Waterfront area of San Francisco is experiencing a remarkable change as early-stage artificial intelligence startups breathe new energy into spaces that once displayed numerous “for lease” signs following the pandemic downturn. Recently, five AI-driven companies-four of which are alumni of Y Combinator-secured leases totaling nearly 24,000 square feet at the Waterfront Plaza complex, signaling a broader resurgence in the city’s commercial real estate market.
AI Sector driving Significant Office Space Demand
This surge aligns with a larger pattern across San Francisco where AI enterprises stand out as one of the few industries expanding their physical footprint. In 2023 alone, these firms leased approximately 1.6 million square feet and now occupy an aggregate of around 5 million square feet throughout the city.Notably, OpenAI represents a substantial portion of this occupied space, underscoring its role as a major player in local tech real estate dynamics.
Future Growth Projections and Economic Impact
Industry experts from CBRE forecast that within five years, AI startups could expand their presence to cover up to 21 million square feet in San Francisco. Such growth has the potential to dramatically reduce the current office vacancy rate-which stands near 36%-and generate tens of thousands of new jobs across various sectors tied to technology innovation and support services.
“The influx of AI companies could redefine downtown’s economic vitality,” says CBRE analyst Colin Yasukochi.
The role and Evolution of Waterfront Plaza
Waterfront Plaza itself is composed of five buildings encompassing over 440,000 square feet. Its tenant composition has historically mirrored broader economic shifts; such as, it previously housed WeWork during that company’s expansion phase. Today’s influx by AI startups marks another chapter in its adaptive use aligned with emerging industry trends.
