AI Firm ScaleAI Secures 180K Square-foot Sublease From AirBnB at Beacon Capital Building in San Francisco

ScaleAI is not only enhancing its artificial intelligence operations but also significantly expanding its real estate presence. The San Francisco-based AI firm has agreed to sublease between 170,000 and 180,000 square feet at 650 Townsend Street, previously occupied by Airbnb. CBRE facilitated this lease.

Significant Lease Deal

This sublease represents San Francisco's largest lease transaction of the year, according to the San Francisco Business Times. ScaleAI has committed to the new space for a duration of 7.5 years, making it a noteworthy development for the city's commercial real estate market.

Property Details and Ownership

The building at 650 Townsend Street is owned by Boston-based Beacon Capital Partners. The property had previously suffered the loss of major tenants like Airbnb and Zynga, which vacated 185,000 square feet in 2021. ScaleAI’s move will see its office space triple from its current 50,000 square feet at 155 5th Street in SoMa. It remains uncertain whether ScaleAI will entirely relocate to the Townsend Street office or maintain its 5th Street lease, which expires next year.

Recent Funding and Market Impact

Earlier this month, ScaleAI secured $1 billion from prominent investors, including Amazon, Meta, and Nvidia, elevating its valuation to $13.8 billion. ScaleAI is among several AI companies that commercial landlords are banking on to rejuvenate San Francisco’s office market.

AI Companies Boosting Office Space

Last year, OpenAI, known for creating ChatGPT, subleased 486,000 square feet in Mission Bay from Uber. Similarly, Anthropic, another AI firm, leased over 230,000 square feet at 500 Howard Street, taking over Slack's former headquarters.

Airbnb’s Office Consolidation

Airbnb previously occupied five buildings across San Francisco, including 650 Townsend Street. After shifting to a fully remote work model, Airbnb downsized to a single building, maintaining about 280,000 square feet at 888 Brannan Street.