MOUNTAIN VIEW — OpenAI is eyeing a lease for an office campus in Mountain View that’s large enough to accommodate well over 1,000 workers, a potential deal that would mark a major expansion for the artificial intelligence company.
The creator of ChatGPT is discussing an agreement to rent a campus consisting of five buildings with addresses of 350 and 380 Ellis St., according to several sources familiar with the situation.
The campus totals 449,000 square feet and has been described as an “exquisite” office hub, according to a brochure circulated for the site.
OpenAI is seeking to lease the entire campus, according to sources, who spoke on the condition of anonymity because they weren’t authorized to discuss the matter. This news organization requested a comment from OpenAI.
“It’s encouraging to see tech companies like OpenAI expanding” in Silicon Valley, said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “The growth we see with artificial intelligence is the same kind of scale we saw back when Google and Facebook were starting up.”
Newmark commercial real estate brokers Phil Mahoney and Jon Mackey are marketing the Mountain View office hub to potential tenants. Both Mackey and Mahoney declined to comment about the leasing status of the campus.
KKR Real Estate Finance Trust seized ownership of the office hub through a deed in lieu of foreclosure posted in July 2024. New York City-based investment firm KKR & Co. Inc. manages the KKR real estate unit.
The foreclosure proceeding placed a value of $120.6 million on the property, one-third of the $357.6 million that a group of real estate investors paid in 2021.
The diminished cost basis for the complex could enable KKR Real Estate to offer attractive rents to entice prospective tenants such as OpenAI and other companies.
TMG Partners, a Bay Area real estate firm, worked with KKR to reposition the complex and create a unified and self-enclosed campus environment, TMG and KKR said in 2024 at the time KKR took ownership.
The Mountain View tech campus is large enough to accommodate 1,800 to 2,200 tech workers, based on typical ratios for employees per square foot.
Some indications have emerged lately to suggest that office market activity and the overall commercial real estate market in Silicon Valley have begun to rebound in solid fashion.
Santa Clara County, San Mateo County, and Fremont commercial property leases totaled 20.4 million square feet during the July-through-September third quarter, according to a report from the Silicon Valley Institute for Regional Studies that was released in partnership with JLL, a commercial real estate firm. The institute is the research arm of Joint Venture Silicon Valley.
Commercial leasing activity in the third quarter was 48.9% higher than the 13.7 million square feet that was leased in the April-through-June second quarter, the report noted.
The survey defined commercial spaces as office, research, industrial, and laboratory buildings. Retail was excluded.
“Some people are saying AI is where their business opportunities lie,” Hancock said. “Some tech companies are consolidating and cutting back in some areas, but tech is also moving resources and hiring into artificial intelligence.”
Artificial intelligence and cutting-edge technology companies such as OpenAI are poised to drive significant job growth and office leasing activity in the near future, experts believe.
“OpenAI and other AI companies are going to be major players, and they are going to hire thousands of people,” Hancock said. “This expansion is going to be good for the region.”