Cloud data company Snowflake is expanding its appetite for real estate with a deal to roughly double its space in downtown Denver as the company races to capitalize on the global artificial intelligence boom.
The fast-growing tech company finalized a deal for a second floor at 1700 Broadway, increasing its regional footprint to about 40,000 square feet, a company spokesperson confirmed to CoStar News. The lease is the latest for the company and others within the AI sector in recent months — including deals that have shattered post-pandemic records — that were initially concentrated around tech hubs such as the San Francisco Bay Area but have since spilled over to smaller markets.
Snowflake signed its original deal for the 14th floor of the roughly 430,275-square-foot tower in 2020, a point at which many tech companies were beginning to pump the brakes on real estate plans as pandemic-induced uncertainty began to wreak havoc on the national office market.
Snowflake inked its new deal with landlord Beacon Capital Partners shortly before executives said the company would abandon its hometown base in San Mateo, California, and instead adopt a “headquarterless” approach with a primary corporate hub in Bozeman, Montana, where several executives had relocated.
Despite the move toward a “globally distributed” workforce and no corporate headquarters, the company’s aggressive revenue and headcount growth in recent months have prompted it to reconsider its approach to physical office space.
Late last year, Snowflake agreed to sublease a three-building office campus in Menlo Park, California, from fellow tech giant Meta in a deal totaling roughly 773,000 square feet. The agreement, scheduled to run through 2033, not only closed one of Silicon Valley’s largest sublet availabilities but also marked the latest evidence of tech tenants’ willingness to sign on to blockbuster deals after years of muted activity.
Warrick Taylor, Snowflake’s vice president of workplace and real estate, said at the time that the expansion was driven by the fact that the Bay Area has been “at the heart of technology and innovation for decades, [and] the most data-driven enterprises, leading startups and best talent in the world are based here, so it’s a natural fit.”
Snowflake employs upward of 7,835 people worldwide, a sharp spike compared to the 4,000 employees it reported a couple of years ago. About 200 of those roles are based out of its Denver hub, a spokesperson said.
Room to grow
Snowflake is part of a strengthening cohort of AI companies that have played a leading role in the tech sector’s prominence as one of the biggest demand generators for office space.
After roughly a decade of fueling record-high spikes in rent growth and demand — often leasing up space before it was even built — tech giants have made deep cuts to their property holdings by shutting office locations, subleasing out unwanted space and walking away from future investments.
The technology industry appears to be back in growth mode after a period of shrinking real estate footprints. Companies such as Apple, Snap, LinkedIn, Amazon, Walmart’s tech unit and Pinterest, among others, are gradually flipping back into office-growth mode.
Leasing among tech companies across the United States rose by more than 21% through the first quarter of the year compared to the same period in 2024, according to CBRE data, a spike that accounted for just shy of 8 million square feet worth of deals. That activity represented a roughly 16.5% share of total office leasing volume nationally and builds off the momentum tech companies generated last year when they accounted for about 18% of all U.S. leasing.
By comparison, leasing among tech companies represented a little more than 14% of the total national leasing volume in 2023, according to CBRE.
In San Francisco alone, AI companies have expanded their collective footprint to more than 5 million square feet over the past couple of years, according to CBRE data, and the sector has the potential to stretch beyond 21 million square feet over the next half decade. If that demand materializes, it has the potential to cut down San Francisco’s record-high vacancy rate by about half and catapult the city back to its pre-pandemic standing as one of the strongest office markets in the world.
‘Enormous opportunity ahead’
Beyond the Bay Area, that demand is unfurling in markets such as Seattle, Boston, New York City and Austin, Texas.
While Snowflake’s Denver expansion is on the smaller end of the spectrum, it is undoubtedly a welcome boost for a city that faces a steep climb toward regaining some of its pre-pandemic traction.
Downtown Denver, in particular, has one of the highest office vacancy rates in the country at about 31.5%, according to CoStar data. What’s more, its longtime dependence on tech and energy companies has made it especially vulnerable to changes that companies in those sectors have made to their real estate footprints in the aftermath of the pandemic, the largest of which has been to adopt a more prudent approach to their real estate portfolios.
Not for Snowflake. With more than 30 office locations worldwide, the company is still steadfastly in growth mode.
Over the past two years alone, it has signed more than 1 million square feet worth of office deals across Silicon Valley, Seattle, London and, most recently, Denver. That expansion streak has coincided with the company’s hiring, which hit a record high in the first quarter of the year after Snowflake brought on more than 400 additional people.
All of that, company executives recently said, are part of trends they expect to only go in one direction: up.
“Our core business is very strong, our product delivery remains on overdrive, and our go-to-market engine continues to get stronger and stronger,” Snowflake CEO Sridhar Ramaswamy recently told analysts. “We are in the zone and there’s still an enormous opportunity ahead.”