OpenAI Eyes 449,000 SF Mountain View Campus - What It Means for CRE
OpenAI is in talks to lease a five-building campus at 350 and 380 Ellis Street in Mountain View. The site totals 449,000 square feet and has been pitched as an "exquisite" office hub in marketing materials.
If finalized, the lease would accommodate well over 1,000 employees, with capacity estimates ranging from roughly 1,800 to 2,200 based on typical planning ratios. The move would signal a meaningful expansion and a clear vote of confidence in Silicon Valley office assets.
The Asset at a Glance
- Addresses: 350 and 380 Ellis St., Mountain View
- Scale: 5 buildings, ~449,000 SF; marketed by Newmark (team includes Phil Mahoney)
- Capacity: Approx. 1,800-2,200 employees based on standard density assumptions
- Ownership: KKR Real Estate Finance Trust via deed in lieu of foreclosure in July 2024
- Valuation at transfer: $120.6M vs. $357.6M purchase price in 2021
- Repositioning: KKR and TMG Partners created a unified, self-enclosed campus environment
Why OpenAI's Interest Matters
AI firms are hiring and consolidating into larger footprints. A full-campus lease by OpenAI would absorb a significant block in a core submarket and create momentum for adjacent assets.
The current owner's lower cost basis could translate into flexible deal structures. Think competitive face rates, TI depth, free rent, and quicker decision cycles to capture a marquee tenant.
Market Context: Activity Is Picking Up
Leasing across Santa Clara County, San Mateo County, and Fremont reached 20.4 million square feet in Q3 (July-September), up 48.9% from 13.7 million square feet in Q2. The tally covers office, research, industrial, and lab; retail excluded.
That uptick tracks with what many are hearing from boards and CFOs: AI is a priority spend. "Some tech companies are consolidating and cutting back in some areas, but tech is also moving resources and hiring into artificial intelligence," said Russell Hancock of Joint Venture Silicon Valley.
For broader market research, see Joint Venture Silicon Valley's work with JLL on regional leasing trends here and JLL Silicon Valley research here.
Leasing and Construction Implications
- Deal Terms: A lower basis may support aggressive economics without distress optics. Watch for longer terms and campus control provisions.
- Speed-to-Occupancy: Pre-negotiated specs and streamlined permitting will win. Early contractor involvement reduces rework and holds schedule.
- TI Strategy: High-density engineering teams require resilient connectivity, meeting rooms that actually get used, and amenity zones that retain talent. Plan for flexible floorplates and fast reconfigurations.
- MEP and Ops: Reliability matters. Evaluate existing electrical capacity, HVAC zoning, and after-hours loads. Build contingencies into commissioning.
- Mobility + Parking: Commuter programs, secure bike storage, and EV readiness help with headcount scaling and local approvals.
What Owners, Developers, and GCs Can Do Now
- Package the Campus: Market clear program options (per-building densities, shared services, amenity mapping). Remove guesswork for the tenant's workplace team.
- Model Multiple Scenarios: Offer phased occupancy and swing space paths. AI hiring can spike; optionality sells.
- Pre-Price TIs: Provide menued TI solutions with schedule ladders. Time is the friction point.
- De-Risk Permitting: Preflight code issues and maintain a warm permit. Shortening lead time is a competitive advantage.
- Demonstrate Operating Efficiency: Publish utilities baselines, maintenance protocols, and upgrade roadmaps. It supports total cost of occupancy decisions.
Signals to Watch
- Lease execution timing and whether it's a full-campus take-down
- Face rates vs. net effective after concessions
- TI budgets, delivery conditions, and schedule commitments
- Hiring cadence and phased occupancy plans
- Follow-on deals by AI firms seeking similar footprints
"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." If this deal lands, expect nearby assets to reprice expectations and reposition quickly to keep pace.
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