Together AI will soon move into a new 150,000-square-foot headquarters in San Francisco’s Showplace Square.
The neocloud start-up inked a deal for two floors of the roughly 329,000-square-foot office building at 2 Henry Adams Street, the San Francisco Business Times reported.
Financial terms of the six-year lease from majority owner RREEF Property Trust were not disclosed. Broker JLL represented Together, while Cushman & Wakefield represented the landlords.
Together plans to move into the 111-year-old brick building this summer from its current digs at 251 Rhode Island Street, a couple of blocks away, where it had initially rented 3,000 square feet three years ago.
The move represents a 4,900 percent jump in office space for the fast growing tech firm, which provides services and infrastructure to allow companies to train and deploy generative AI models in the cloud.
The company now employs just more than 300 people, Kai Mak, its chief revenue officer, told the Business Times. By the end of the year, it aims to employ at least 500 workers.
“As we’re in this hypergrowth phase with our business, we just want to be in a sustainable place that can have the envelope to fit our growth,” he said.
The startup joins a legion of aggressive startups with links to San Francisco’s booming AI sector expanding at light speed across the city, such as Anthropic. Many of those companies, like Together, are adding to their offices in fits and starts — a departure from technology tenants of the past decade, which generally snapped up blocks of offices at once.
The dynamic is helping drive the recovery of San Francisco’s office market, which has seen its office vacancy fall to 30.8 percent in the first three months of the year, down from 32.8 percent at the end of last year, according to CBRE.
The decline this quarter comes as San Francisco tenants absorbed 1.8 million square feet of offices – the highest quarterly net absorption since CBRE began tracking it.
Even after a quarter’s worth of robust leasing and blockbuster deals from Anthropic and OpenAI, demand for offices in the city has not declined, according to Colin Yasukochi, executive director of CBRE’s Tech Insights Center. While AI firms are driving the leasing frenzy, they’ve helped convince tenants in other sectors to close the vacancy gap.
Mak said he soon expects to see “some potential monster IPOs,” which could usher in even more growth among AI companies — including their office needs.
“We’re already seeing the office environment be quite competitive. I only expect that to accelerate over the next year or two, so it was quite important for us to ensure we got a really great space,” he told the Business Times.
– Dana Bartholomew