Salesforce is expanding its footprint at its namesake New York tower, adding more than 71,000 square feet as it grows to meet surging demand from the artificial intelligence boom.
The San Francisco-based software company signed a dual renewal and expansion agreement at the Salesforce Tower across the street from Bryant Park, a deal that enlarges its footprint in the 42-story building by 25%, a Salesforce spokesperson confirmed to CoStar News. The agreement with La Caisse, the property’s landlord, means the tech company will
add about 71,260 square feet to its existing space to occupy more than 310,500 square feet.
“We’re in a new era of work with the rise of autonomous AI agents, and our vision for real estate is to create the right spaces and experiences that accelerate growth and empower humans, agents and robots to work alongside one another,” Relina Bulchandani, Salesforce’s executive vice president of real estate and workplace services, said in a statement. “New York is a critical market for Salesforce, and this expansion will help us unlock new opportunities.”
Salesforce made its New York office market debut about 20 years ago and established its primary hub in Manhattan’s Salesforce Tower in 2016.
The company’s new lease agreement extends through May 2029, according to people involved in the negotiations. The additional space will be outfitted to house an employee training center, collaboration and hybrid-work areas, and dedicated room for customer-focused initiatives, a spokesperson said.
Fewer heads, but still more space
The expansion stands out against a backdrop of downsizing and real estate cuts that other global tech companies have made to their office portfolios in recent years. Yet the dramatic surge unfolding across the AI slice of the industry has fueled a slew of large leases that are helping to prop up office markets across the country.
Leasing among tech companies nationally rose by more than 21% through the first quarter of the year compared with 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 in the United States and builds off the momentum tech companies generated last year when they accounted for about 18% of all U.S. leasing.
By comparison, in 2023, leasing among tech companies represented a little more than 14% of the total national leasing volume, according to CBRE.
In San Francisco alone, AI companies have swelled 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 five years.
While much of that demand has been generated by AI-specific companies such as OpenAI, Harvey AI, Anthropic and Scale AI, more established tech names such as Salesforce are jumping aboard, signaling that they are also willing to invest in physical real estate in order to stay ahead of the competition.
The New York expansion is a stark turnaround from when Salesforce dumped massive chunks of its global real estate portfolio in a scramble to curb extraneous expenses. The company just last year reported that it leased or owned 900,000 square feet in San Francisco alone, about 45% less space than the 1.6 million square feet it claimed to occupy in early 2023.
Marc Benioff, the company’s CEO, even said on a recent podcast that Salesforce had cut thousands of jobs across its customer support departments because “I need less heads with AI.”
“Because of the benefits and efficiencies of Agentforce, we’ve seen the number of support cases we handle decline, and we no longer need to actively backfill support engineer roles,” a spokesperson told CoStar News about Salesforce’s AI services platform. “We’ve successfully redeployed hundreds of employees into other areas like professional services, sales and customer success.”
Even with the AI-driven job cuts, however, the company’s Salesforce Tower expansion shows that its remaining workforce still needs more physical office space.