Sep 19, 2025

After years of searching, Elon Musk's X has found its first subtenant at the social media company's former San Francisco headquarters in the Mid-Market district - or Lower Hayes, as some are trying to rebrand the long troubled neighborhood. Artificial intelligence startup Motive subleased 40,000 square feet at 1355 Market St.'s 11th floor. X's broker Mike Sample of JLL confirmed the lease, which expires at the end of April 2029. Motive, formerly KeepTruckin, has also added the address to its website. San Francisco Business Times first reported the deal. Shu White, chief legal officer for Motive, which offers AI-powered vehicle operations and automation management, said that the company has always been in San Francisco and that the city's "energy, innovation and talent make it the ideal place for us to invest." Motive joins a handful of new tech firms coming to the Mid-Market area, which has one of the highest office vacancy rates in the city but has seen an uptick of interest from startups, according to Sample. "It's some of the nicest tech space in the city," said Sample, referring to 1355 Market. "We've had small startups up to the world's largest AI companies that have looked at it." Still, the majority of space at 1355 Market St. and the attached One 10th St. remains empty. Around 740,000 square feet of office space is being marketed for sublease, with some of it having been listed since 2020. The Mid-Market area has struggled with a negative reputation due to crime, filthy streets and a business exodus that has worsened since the pandemic. But Sample credits the fresh interest in part to JLL's marketing effort for the area. Since JLL was hired to fill X's abandoned headquarters building with new tenants last summer, the firm has referred to the area as Lower Hayes, an extension of Hayes Valley, which is a few blocks west. "Lower Hayes is benefiting also from being so close to Hayes Valley, which is the beginning for so many companies. It's a really great part of the city," he said. Hayes Valley, a small neighborhood that brushes up against Civic Center, features vibrant retail and food offerings and has a nickname as well: Cerebral Valley. That's a nod to its emergence as a hot spot for AI startups, builders and thinkers - particularly following the explosion of generative AI in recent years. The area is home to co-working spaces, and became known for housing pre-seed and seed stage startups in converted apartments. But the neighborhood has little space for expansion - and companies birthed there subsequently look to neighboring downtown neighborhoods to grow into larger and customized offices. JLL's marketing isn't the first try to rebrand in Mid-Market and the nearby Van Ness Avenue thoroughfare area. At 30 Van Ness Ave., a massive 47-story tower project was branded as Hayes Point - despite being a block away from Hayes Street - but has since stopped construction. The City Planning Department study called the Van Ness area the Hub. Whatever you want to call Mid-Market, it is drawing new businesses. Across the street at 1390 Market St. is the new office of Pump, which markets itself as the "Costco for cloud" by saving customers' subscription fees on cloud computing services. Y Combinator-backed startups have set up at 989 Market St. Ross Stores also opened a new outpost on the eastern edge of the district. But the area remains significantly emptier compared to before the pandemic. X left San Francisco entirely a year ago for Austin and other Bay Area offices. Uber moved to Mission Bay. Block, formerly Square, gave up its headquarters but has a major office in Oakland. Zendesk moved to 181 Fremont. These days, the biggest employer in the area is the city itself. San Francisco's government now leases over 400,000 square feet at the former Uber and Block headquarters at 1455 Market St., with the option to buy the building. There are also numerous city offices on Van Ness Avenue. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers. This story was originally published September 18, 2025 at 7:09 PM.