San Francisco’s downtown office market just got a jolt of tech and AI energy, with Dropbox locking down an entire South Financial District building and AI outfit Decagon taking a chunky slice of SoMa. The twin headquarters deals with landlord Boston Properties filling 50 Hawthorne and pushing 680 Folsom past 90% leased, reinforcing a clear trend: top-tier, amenity-heavy offices are still very much in play for growing tech companies.
According to the San Francisco Business Times, more than 200,000 square feet of leases were inked across 680 Folsom and 50 Hawthorne. Dropbox is taking the entire roughly 64,000-square-foot 50 Hawthorne building for its new headquarters, while Decagon is leasing about 70,000 square feet across the sixth and seventh floors at 680 Folsom. The paper reported that national construction firm Swinerton Builders and a separate software tenant each signed roughly 35,000-square-foot deals at 680 Folsom, driving that property past the 90% occupancy mark. BXP touted the same package of leases in a recent BXP press release, where Senior Vice President of Leasing Christine Yuen said, per Business Wire. “Today’s companies prioritize highly amenitized, transit-oriented workplaces that foster collaboration and authentically celebrate their culture.”
AI tenants are reshaping downtown leasing
Much of the recent activity downtown is driven by AI and adjacent tech firms seeking collaborative, high-quality space rather than sprawling, half-empty campuses. The San Francisco Chronicle reported, citing CBRE data, that first-quarter net absorption in the city finally turned positive and vacancy slipped to roughly 30.8%, with AI tenants grabbing a hefty share of the newly leased square footage. That tightening backdrop helps explain why heavily upgraded buildings like 680 Folsom are suddenly finding takers instead of sitting on the sidelines.
Dropbox consolidates downtown after Mission Bay subleases
Dropbox has been quietly unwinding its Mission Bay footprint for years, putting significant portions of its 1800 Owens Street campus on the sublease market as part of a broader space reshuffle. The Real Deal reported in February that the company was preparing to vacate much of Mission Bay and had been eyeing 50 Hawthorne as a potential new headquarters. The freshly announced BXP deal effectively seals that pivot, moving Dropbox’s center of gravity into the South Financial District. Brokers on the transactions were identified in BXP’s materials, and CBRE represented Dropbox, according to the landlord.
BXP’s repositioning bet appears to be paying off
BXP and its partners have been pouring money into 680 Folsom’s amenity package, adding a revamped lounge, flexible workspace, and a rooftop geared for events, features that the owner highlights on BXP and in its company announcement. Brokers say that kind of hospitality-grade setup is exactly what fast-growing enterprise tech and AI tenants want as they trade sheer square footage for smaller, higher-quality hubs. Citywide office vacancy is still elevated, but marquee deals like Dropbox and Decagon are a concrete sign that demand is clustering around trophy spaces in and around the South Financial District rather than disappearing altogether.
