Landlords Filed Lawsuit Against Physical Intelligence
The property owners seek an eviction at 2000 Folsom St. to make room for a new tenant.
Updated on Oct. 6, 2026 in Remote Work
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The owners of 2000 Folsom St. have filed a lawsuit in San Francisco Superior Court to evict the AI startup Physical Intelligence for failing to vacate the premises. The landlords are pursuing the eviction to facilitate a move-in by their new tenant, Anthropic.
Why it matters
The dispute highlights the competitive nature of the San Francisco commercial real estate market, as landlords look to secure high-profile tenants for their properties. The owners claim the tenant refused to depart after their lease expired, complicating the transition for the incoming tenant.
The property at 2000 Folsom St. spans 98,000 square feet, with the landlord seeking more than $13,000 in daily holdover damages. The tenant's rent was previously adjusted to $160,000 per month under a lease amendment.
The players
Physical Intelligence
Physical Intelligence is an AI startup currently involved in a lease dispute at a San Francisco property.
Anthropic
Anthropic is an AI company intended to become the new tenant of the property at 2000 Folsom St.
The details
The lawsuit alleges that Physical Intelligence expanded its use of the facility beyond the original 29,000 square feet leased in January and made unauthorized physical improvements to the building. The landlord issued a termination notice in May after the company allegedly refused to leave when the lease expired in September.
Timeline
January 2026: Physical Intelligence signed the initial lease.
May 2026: The landlord sent an official termination notice.
September 2026: The lease amendment expired.
Week of October 6, 2026: Proposed move-in date for the new tenant, Anthropic.
Market Landscape
This dispute illustrates the intense demand for high-quality office space among top-tier AI companies competing for limited infrastructure in San Francisco. The litigation reflects a broader trend of rapid expansion where tech firms quickly outgrow initial leases in sought-after locations.
While the litigation is a private business matter, it serves as a reminder of the volatility in commercial lease agreements for rapidly scaling firms. The move underscores how shifting tenancy at major office locations can cause disruptions for neighboring businesses and local stakeholders.
The takeaway
Commercial tenants should ensure all physical improvements are pre-authorized to avoid triggering eviction-related litigation. Maintaining clear documentation of lease expirations remains essential for both landlords and high-growth companies to prevent costly holdover damages.
Further reading
For more on the changing office needs of local tech firms, explore the latest Remote Work trends.
Source note: This article includes information reported by The San Francisco Standard.
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