Landlords Sued Physical Intelligence Over Folsom Street Lease
Owners of 2000 Folsom St. filed for eviction after a lease dispute, seeking $13,000 in daily holdover damages.
Updated on Oct. 6, 2026 in Remote Work
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The owners of 2000 Folsom St. have launched a lawsuit against robotics startup Physical Intelligence for failing to vacate their office space. The landlords are moving to clear the building in order to accommodate a lease agreement with Anthropic.
Why it matters
This dispute highlights the rapid turnover and high-stakes office leasing environment in San Francisco as AI firms fight for premium square footage. The case now sits with the San Francisco Superior Court to determine if the tenant must vacate.
The landlords seek daily holdover damages of $13,000 for the 98,000-square-foot property. While rent reached $160,000 per month under an amendment, the legal dispute over the expiration remains unresolved by the courts.
The players
Physical Intelligence
A robotics startup currently facing a lawsuit over its occupancy of an office property.
Anthropic
An AI company slated to become the new tenant at the 2000 Folsom St. property.
San Francisco Superior Court
The local court where the eviction lawsuit was filed.
The details
The owners of 2000 Folsom St. allege that Physical Intelligence refused to leave after their lease amendment expired in September, and further claim the tenant made unauthorized improvements and expanded into areas outside their agreement. The landlords intend to transition the space to Anthropic as a new tenant. The outcome will now depend on proceedings in the San Francisco Superior Court, where the owners have filed for eviction to reclaim the property.
Timeline
January 2026: Physical Intelligence signed the initial lease.
May 2026: Landlords sent a formal termination notice.
September 2026: The lease amendment expired.
Week of October 6, 2026: The proposed move-in date for the new tenant.
Across the Bay
This dispute follows a clear trend in the San Francisco commercial market where high-growth AI firms compete for limited office space. It marks a departure from typical vacancy issues as landlords actively clear buildings to accommodate new, high-demand tenants.
The transition of the 2000 Folsom St. property to a new tenant may shift local traffic and activity levels near the block by mid-October. Residents should watch for upcoming court filings if they are tracking the site's occupancy status.
The takeaway
This case serves as a reminder of the volatility in local commercial real estate as firms compete for prime space. Readers should track upcoming San Francisco Superior Court proceedings to see if the building changes tenants by the mid-October target.
Further reading
For more context on the city's shifting commercial real estate landscape, see our coverage of Remote Work.
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Should commercial landlords be able to force tenants to vacate immediately after a lease expires?
