OpenAI is opening new offices in a historic building in New York

OpenAI is leasing its first office in New York City — fueling property owners’ hopes that the growing artificial intelligence industry will develop a greater appetite for office space. The creator of ChatGPT reached an agreement this month under which she will rent 90,000 square feet (about 8,360 square meters) in the historic Puck building, which is located in the trendy SoHo neighborhood in Manhattan – according to people familiar with the matter.

In September, OpenAI leased an entire six-story building in San Francisco’s Mission Bay neighborhood—making it the city’s largest office lease of the year so far. The company also subleased two buildings from Uber about a year ago, and is expected to announce the opening of new office complexes soon.

Other major AI companies, such as Anthropic and Palantir, have also recently snapped up office space in New York, the San Francisco Bay Area, Denver, Atlanta and Seattle.

After a difficult period in which office spaces were emptied, rents were reduced and transactions were carried out at bargain prices, the office rental market is showing signs of stabilization, with an increase in the number of transactions in certain cities, including New York, during the third quarter of this year.

Increasing demand from the rapidly growing artificial intelligence sector in the technology industry is another positive sign for the market; This, after large tech companies reduced their office space this year.

“Artificial intelligence is not going to be a magic solution [בשביל שוק המשרדים]”, said Jacob Rowden, Head of Office Research at JLL, a yield real estate services company. “But she is part of the broader recovery story.”

The renting of the offices by artificial intelligence businesses is especially common in San Francisco – the city where the telecommuting trend hit the hardest. Artificial intelligence businesses have leased a total of about 5 million square feet (about 464,500 square meters) in San Francisco, accounting for more than 5 percent of the city’s total office space, according to JLL.

The amount of office space for AI companies may quadruple in the coming years

In all, artificial intelligence companies have signed 57 office leases in San Francisco this year, JLL said, with 40 of them belonging to small and medium-sized companies leasing their first offices.

The demand for office spaces also comes from companies whose main occupation is artificial intelligence, and also from companies such as Google, Microsoft and Apple, which invest significantly in the field.

The amount of office space being leased by AI companies “may quadruple over the next six years,” said Chris Roeder, head of brokerage at JLL’s San Francisco office.

The 140-year-old Puck Building in New York, named after the satirical magazine “Puck”, is owned by the founder of the Kushner Companies, Charles Kushner – the father of Jared Kushner, who served as the company’s CEO before retiring to work for His son-in-law, former US President Donald Trump.

OpenAI is familiar with the Pack building, among other things, because it also houses Thrive Capital, a venture capital firm that recently led a $6.6 billion funding round for the AI ​​company. Thrive Capital was founded by Jared Kushner’s brother – Joshua Kushner.