Fresh out of Stanford University, a young AI founder wanted to take the next step in the hallowed San Francisco startup playbook: purchase a so-called hacker house, fill it with his small team, and buckle down to build a company. He set his sights on Potrero Hill, a quiet, suburbanesque neighborhood that has experienced a breathless glow-up after OpenAI established its headquarters in the adjacent Mission Bay three years ago.

For his first-choice home, the founder wanted to come in strong. He bid 30% over asking, all cash. It wasn’t enough. He didn’t want to take any chances on the next home he found, so offered 50% over the list price, all cash, no contingencies.

“I thought we got it for sure,” the founder’s real estate agent, Milan Jezdimirovic, told The Real Deal. Jezdimirovic had attended every open house for the property, and made it clear to the seller his client was willing to be aggressive in purchasing the home. To go 50 percent over asking, all-cash, in the relatively modest Potrero Hill felt like a home run. Yet, they were outbid again. 

Welcome to Area AI.

“I was speechless,” he said. “We did everything we could. It’s incredible what the ceiling is, I mean, there is no ceiling.”

As the artificial intelligence industry announces itself as the latest California gold rush, it has resuscitated San Francisco in ways old and new. Long desirable neighborhoods such as Presidio Heights, Cow Hollow and Jackson Square have seen their fortunes return from a pandemic lull. Yet, the city’s southeastern district, a paved bayside paradise known for loading docks, warehouses, and wide streets has seen a surprising surge in demand as major artificial intelligence companies and their battalions of one-percenter employees continue to plant their flags.

The moniker developed around 2023, when OpenAI relocated to 1515 Third St in Mission Bay, the neighborhood just south of McCovey Cove, the channel most famous as a landing spot for the home runs of Giants legend Barry Bonds.

Although divorced from the hubbub of the Financial District, Mission Bay attracted its own share of heavy hitters from the last tech boom. Now, much of that space is occupied by OpenAI, which took over nearly a million square feet previously occupied by names such as DropBox, Uber and Old Navy. Companies such as chipmaker Nvidia and crypto-exchange platform Coinbase have also expanded into the neighborhood. While the rest of the city continues to struggle with office vacancy rates, Mission Bay is nearly out of room, according to JLL.

That energy has had a gravitational pull. The University of California San Francisco recently spent nearly a billion dollars to expand its school of dentistry in Mission Bay, and the San Francisco Unified School District is preparing to open Mission Bay Elementary in August, its first new public school in decades.

“That whole area of the city is up and coming,” said Derek Daniels, San Francisco research lead for Colliers.

Mission Bay’s rise wasn’t random. The San Francisco Giants organization had been eyeing a redevelopment of Mission Rock – a northern carve out of the Mission Bay neighborhood — as far back as the early 2000s. The Giants, with developer Tishman Speyer, completed the first of the four-phase, 28-acre, $2.5 billion megaproject in 2024. It included two new office towers — with tenants such as Visa’s global headquarters, the Golden State Warriors and Blue Bottle — more than 500 housing units, 550,000 square feet of new office space, and 52,000 square feet of retail. Phase 2 doesn’t have a start date, but is slated to begin soon. 

The effect has spilled into the residential market. The AI Boom has brought a flood of employees making base salaries around $500,000 who want to live near their offices, and the competition for Mission Bay’s apartments and condos has gotten fierce, with bidding wars pushing rents up sometimes by $1,000 or more, and condos going for well above asking price.

“For apartments, we will email the top five applicants and ask if there is anything else they can provide to help them stand out, and then they just start bidding against each other,” Jezdimirovic said. A recent rental hit the market for $7,890 and eventually leased for $8,700, while a recent three-bedroom rented for $15,000, he said. Over the last 12 months, the median prices for studios in Mission Bay have jumped 37 percent, two-bedrooms jumped 44 percent and one-bedrooms saw a 15 percent rise, according to Zumper.

The median price for a condo rose 13.2 percent over the last year, to $1.2 million, according to Compass. Jezdimirovic expects that number to continue to rise. He recently listed a 970 square-foot, one-bedroom condo for $1.2 million and eventually sold for $150,000 over asking.

“Today is not even comparable to 10 years ago,” Jezdimirovic said of Mission Bay. “Even just within the last two or three years, we’ve finally seen the full establishment of the neighborhood.”

The spillover effect has been dramatic for areas such as Potrero Hill. The neighborhood’s elevated views, easy highway access, and uniquely sunny weather have long made it a desirable landing place for young families. But over the last three years, it’s taken on a new role: as both a hot spot for hacker houses — homes essentially turned into dorms for tech entrepreneurs to live and work alongside one another— as well as the migration point for AI employees looking to settle down into family life or quieter living. In other words: Area AI’s suburb.

The median price for a single-family home rose 16 percent over the last year, reaching more than $2 million, according to compass. On average, homes are selling for 42 percent above asking, one of the highest rates of overpay in the city.

Jerry Rice Jr, (yes, son of that Jerry Rice), has worked as an agent in the area for 10 years and said he really began to see it surge around January. The area already has limited supply and few sellers — only 40 homes sold over the last 12 months — pressure that Rice said the AI wealth has only exacerbated.

“It’s been hot all year,” Rice said. “In Potrero Hill, you have all the benefits of the city without living in the city. The clients are largely family-oriented, with AI jobs and have a lot of liquid wealth. We’re seeing big cash offers.”

Rice said the nearby Dogpatch neighborhood, long characterized by warehouses and dilapidated buildings, is going to be the next beneficiary of the Area AI effect. The residential market has already started to creep up. The median price for a condo rose 7.3 percent over the last year, to $1.1 million, and total condo sales are up 15.2 percent, according to Compass.

The blue-chip startup accelerator Y Combinator, once led by OpenAI founder Sam Altman, relocated to the Dogpatch in 2023. Earlier this week, developer Brookfield, who has proposed a mega redevelopment of Pier 70 that would bring about 2 million square feet of commercial space and more than 2,000 new homes, requested adding 600 more units to the plan, bringing the total to 2,750. 

“About 15 years ago, people told me the Dogpatch was nothing,” Rice said. “The Dogpatch is going to look totally different in five to 10 years. If I were an investor, I would start looking in that area, because that’s a hidden gem with a lot of upside.”

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Forget the glass towers. SF’s AI boom finds a home in a 19th-century neighborhood.

Troy Lowrie, the Denver entrepreneur who built and then sold a portfolio of strip clubs across six states, is selling his Castle Pines mansion because he says the house deserves an owner who will be there full time.

Lowrie and his wife, Tenicia, are asking $7.8 million for the 11,147-square-foot home, which overlooks the 12th hole of Castle Pines Golf Club. The couple bought the property in 2022 for $6.3 million after selling their longtime Golden mansion for $6.4 million.

Jerome and Mary Kern built the home in 2008. Jerome Kern, who died in 2024, was a telecommunications attorney and philanthropist widely credited with rescuing the Colorado Symphony from bankruptcy in 2011.

The five-bedroom, seven-bathroom home was designed by BOSS Architecture and Semple Brown Design and named Home of the Year by Colorado Homes & Lifestyles magazine in 2012. It has a Castle Rock address because it’s in an incorporated part of Douglas County, just outside Castle Pines limits.

The Lowries weren’t in the market when they stumbled on it.

“We had already bought land in Sedalia and were planning to build,” Troy Lowrie said.

But then they walked through Albion Place. “It’s impossible to build something like this now. The concrete alone would cost at least $3 million,” he said.

Lowrie said the grounds hooked him, especially the year-round heated pools, the glass-walled garden studio and tea house, the koi pond with cascading waterfalls, fire features, and mature 250-foot pine trees on the 1.11-acre lot.

“You feel like you’re in the mountains,” he said.

The home blends centuries-old materials with a modern aesthetic. A 16th-century granite fireplace mantel anchors one room; a 17th-century marble mantel anchors another. Walls of glass throughout dissolve the boundary between inside and out, and a dramatic gallery-style entry opens to soaring ceilings.

After moving in, the Lowries put their own stamp on the home.

Jimothy, a raccoon who may have short-spine syndrome, has gone viral overnight after being spotted around Seattle.

KIRO host John Curley tried to describe the uniquely shaped animal, who has quickly become a local celebrity, on “The John Curley Show” on KIRO Newsradio.

“Just imagine a raccoon for a moment,” Curley said. “Normal raccoon in your mind. There’s a raccoon. He has the black around his eyes. You know why that is? That’s to cut down on glare, so he can see better. Like a football player has the black eye shade on there. So, a normal raccoon. Now, just imagine if you took the raccoon and you put one hand on his like snout, and you put the other hand on his backside there, and you had superhuman strength, and you were able to kind of crush him like a can, without killing him.

“No, then you kill him and throw him in the garbage. No, you just squish him a little bit, and you crush him up,” he continued. “Imagine if he’s made out of clay. Then all of a sudden, like, OK, you know he’s got this kind of bump on his back. Well, that’s what this thing looks like. Took me a long way to get to it.”

Jimothy seen on porches, wandering through Ballard

In one video, Jimothy is seen dipping his hands into a bowl on a porch. Curley debunked the common myth that raccoons wash their food, explaining that water actually stimulates nerve endings in their fingers, helping them feel what they’re eating better.

“The raccoon will dip the food, if they find food, in water all the time, and people like, ‘Oh, they’re always washing their food. They got hygiene on their mind.’ No, it helps to stimulate the end of their fingers so that the nerve endings are more sensitive,” he said. “So they do that, and even when they can’t find water, they’ll turn it like they’re spinning it to put it in water. It’s to create more sensitivity, so they have a better idea of what they’re eating.”

Ballard residents have reported seeing Jimothy wandering across backyard decks, drinking from a dog’s water bowl, and sitting in neighborhood trees.

Watch the full discussion in the video above.

Listen to John Curley weekday afternoons from 3 – 7 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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