ScaleAI takes 180K sf, San Francisco’s largest office lease of 2024

ScaleAI is not only scaling up its artificial intelligence operations, but its real estate footprint, too. 

The San Francisco-based AI firm is in a deal to sublease between 170,000 and 180,000 square feet at 650 Townsend Street — space previously occupied by Airbnb, according to the San Francisco Chronicle. CBRE brokered the lease. 

The deal marks San Francisco’s largest lease so far this year, the San Francisco Business Times reported. ScaleAI committed to the space for 7.5 years, according to one source.

The building at 650 Townsend Street is owned by Beacon Capital Partners, based in Boston, according to property records. 

The lease is a win for the building, which not only suffered the loss of Airbnb, but also game maker Zynga, which exited about 185,000 square feet at the building in 2021. 

With the move, ScaleAI will triple its space. The firm currently occupies about 50,000 square feet at 155 5th Street in SoMa, though it’s unclear whether it will give up that space and relocate fully to the Townsend office, which sits within Showplace Square. The 5th Street lease is set to expire next year. 

Earlier this month, ScaleAI raised $1 billion from investors including Amazon.com, Meta and stock market darling Nvidia, pegging its valuation at $13.8 billion. The firm is one of many AI-focused companies that commercial landlords have been betting on, hoping their growth will help boost the city’s office market. 

Last year, OpenAI, the company behind ChatGPT, took over 486,000 square feet of space in Mission Bay through a sublease from Uber. Anthropic, another AI company, has leased more than 230,000 square feet at 500 Howard Street, taking over Slack’s former headquarters. 

Airbnb used to occupy five buildings across San Francisco, including 650 Townsend Street. But after it shifted to fully remote, the short-term rental company shrunk to one building — about 280,000 square feet at 888 Brannan Street.

— Isabella Farr