More San Francisco Offices Leased by AI

Yet another artificial intelligence firm is setting up shop in the heart of San Francisco.

Reflection AI leased two floors at 140 New Montgomery Street in South of Market totaling 25,000 square feet, the San Francisco Business Times reported. Together with fellow new tenant A* Capital, which just leased 5,000 square feet on one floor, the 26-story historic building will reach 94 percent occupancy, per data from landlord Pembroke cited by the Business Times.

The leases at the century-old skyscraper breathe new life into the building after the departure of Yelp in 2021. As Yelp shifted to a remote-prioritizing work model, the company began subleasing its offices there piece by piece. Pembroke has been working to attract tenants to the building with renovations and upgraded amenities. One of Reflection AI’s newly leased floors in the building is currently under renovation.

“We’ve had to backfill the space with a lot of new companies,” Stacey Spurr, Pembroke’s regional director for the West Coast, told the Business Times. “The change from prepandemic to now is that the groups that we’ve leased have been leaning towards seeking entertaining and gathering spaces, which 140 [New Montgomery] really is well-catered to.”

AI giants like OpenAI and Anthropic have been growing their footprints in San Francisco, as have other AI firms like Decagon and Medra.

The surge in AI leasing has revitalized the city’s commercial real estate market after companies shifted to remote work after the pandemic. Last year, AI companies leased 2.5 million square feet across the city and occupy 7 million square feet of offices in the city, representing about 12 percent of San Francisco’s total occupied space, according to CBRE. Office leasing demand also hit an all-time high, with tenants in the market seeking about 8 million square feet of office space; AI companies accounted for 2.8 million square feet, or 35 percent, of that demand. — Chris Malone Méndez