Intercom Leases Bigger Office Space Next to Current Home

Yet another artificial intelligence-powered company is expanding its office footprint in San Francisco.

Intercom, a locally based tech firm that makes AI customer service software, leased approximately 45,000 square feet of offices at 85 Second Street in the Financial District, the San Francisco Business Times reported. The firm isn’t moving far from its current 40,000 square feet at the KPMG Building next door at 55 Second Street.

Intercom was reportedly expected to renew its lease at 55 Second Street, according to sources close to the matter cited by the Business Times. Paramount Group, a Manhattan-based investor that operates the building, reportedly couldn’t keep up with its timeline for completing the renewal, leading Intercom to sign the lease at 85 Second, per the Business Times.

The AI firm’s departure from 55 Second Street marks the latest exit from the building.

KPMG, the building’s namesake tenant, announced in late 2024 that it planned to move out of the structure in September this year. The professional services firm will relocate into a new 96,296-square-foot space at 505 Howard Street, the Business Times reported. Workforce management software company Rippling signed a lease to shift its headquarters to 430 California Street from 55 Second in June 2024.

The 380,000-square-foot 55 Second Street is backed by a $187.5 million loan that matures in October. Last year, Paramount’s lenders listed the debt for sale, though no deal for the loan has emerged yet.

AI companies like Intercom have been key players in driving demand for office space in post-pandemic San Francisco. Earlier this week, news surfaced that Decagon, another AI-powered customer service company, is in negotiations to lease approximately 70,000 square feet at 680 Folsom Street.

Overall, vacant or available office space in San Francisco decreased by nearly 2 million square feet last quarter, making for the steepest drop in office availability in four consecutive quarters of decline. Companies, many of them tech and AI firms, leased more than 1 million more square feet that they vacated in the fourth quarter, marking the biggest rate of positive absorption since 2018. — Chris Malone Méndez