An artificial intelligence startup for the legal industry is expanding its headquarters in downtown San Francisco, where AI firms flush with investor cash are transforming the city's beleaguered post-pandemic office market.
Harvey AI is planning to lease two more floors at 201 Third St., according to a source with knowledge of the deal in the city's tech-heavy South of Market District, a former industrial hub that's become a magnet for AI startups.
The high-flying AI startup, a provider of automation services for the legal industry, declined to comment when reached by email by CoStar News on the latest expansion. It came only days after Harvey announced it had raised $200 million in an early spring funding round that valued the firm at $11 billion, up from $8 billion when it last raised money at the end of 2025 and more than double its worth last summer.
The new space adds almost 60,000 square feet to Harvey’s San Francisco headquarters, bringing its total to around 150,000 square feet.
The growth comes as AI companies are channeling some of their recent record-levels of fundraising into leasing real estate in the nation's tech capital, which is basking in the sudden turnaround after several years of sparse foot traffic and half-empty office buildings.
OpenAI, Anthropic and other AI firms shattered fundraising records in the first three months of the year, bringing in $297 billion, according to data from Crunchbase, which tracks private investment. The AI boom has ignited a flurry of leases in San Francisco and Silicon Valley after a long period of dormancy in the aftermath of the COVID-19 pandemic.
'Place to be'
JLL reported that AI companies accounted for nearly 40% of its leasing volume during the first quarter of 2026, predicting that artificial intelligence companies could double their square footage in the city from about 7 million square feet currently to as much as 14 million square feet by 2030.
“San Francisco is now seen as the place to be,” Chris Pham, a senior analyst at JLL who tracks the AI sector, told CoStar News.
Pham noted a noticeable uptick in companies large and small touring available office buildings in SoMa and other tech-forward former industrial neighborhoods such as the North Waterfront and Mission Bay, where some prime areas offering bay views and fashionable brick-and-timber buildings have little office space left to lease.
San Francisco was the hardest-hit office market in the country in the aftermath of the COVID-19 pandemic shutdown, as employees shifted to remote work. In the past year, that trend finally reversed.
While the office vacancy rate is still close to 22%, given years of move-outs and the large inventory of legacy space yet to be repositioned, it has begun to fall as a growing number of startups have signed leases to accommodate expansions or occupy new space in the city.
Office rents are also stabilizing, especially at the upper end of the market, in buildings with "hospitality‑inspired services" and "modern configurations suited to hybrid work," illustrating improving tenant confidence and the depth of demand for best‑in‑class space, according to CoStar.
Four-year-old HarveyAI — named after Harvey Specter, the lead character from the TV drama "Suits" — agreed last summer to lease around 92,000 square feet at the corner building owned by Los Angeles-based Kilroy Realty. The building has become a magnet for AI startups and other tech-related tenants in recent months.
Data analytics company Amplitude decided last year to stay in the building after subleasing almost two full floors — nearly 60,000 square feet — from food delivery service Postmates in 2021, according to regulatory filings. Tubi, the free ad-supported streaming service owned by Fox, relocated this past fall to a new hub on the 12th floor, with open-beam ceilings and sprawling views of the city and the San Francisco Bay.
San Francisco's mayor, Daniel Lurie, and a handful of other local luminaries showed up for a welcome event at Tubi's new offices and heralded the move as evidence of the city's triumphant recovery after several difficult post-pandemic years.
As recently as last year, the former industrial neighborhood was deemed a “no show” zone by some of the city’s commercial brokers, due to large blocks of empty tech offices and concerns about crime and disorder.
But a flurry of AI leases has brought life back to the South of Market neighborhood. Artificial intelligence giant Anthropic, which raised another $30 billion last month amid speculation about an imminent initial public offering of stock, recently expanded its presence in the neighborhood.
Just months after the maker of chatbot Claude leased an entire 25-story office tower at 300 Howard St., Anthropic committed to another three floors totaling around 100,000 square feet at 400 Howard St., just across the street, calling it part of the company’s “long-term commitment to San Francisco."
The new leases at 201 Third St. also represent a win for Kilroy. As of early last year, the building was less than 26% occupied, according to information filed with the Securities and Exchange Commission. But company filings from the end of the year report the building as 56% occupied as of December.
The building at 201 Third St. is a glass-and-concrete box dating from the early 1980s. The common spaces feature minimalist, midcentury modern décor, and sculptures and fixtures in bold primary colors. The ground floor houses a Starbucks and a Brazilian steakhouse, Fogo De Chao.
Harvey's move to the SoMa neighborhood late last year represented a significant expansion from its previous offices a few blocks away at 575 Market St. in the city's Financial District, where it had occupied a little more than 30,000 square feet for the past two years.
Legal AI startups have boomed as tools powered by large language models promise to save lawyers time on grunt work such as summarizing large documents, looking for red flags and drafting. Harvey says it has more than 25,000 custom AI agents doing work in areas including M&A work, due diligence, contract drafting and document review.
Harvey AI was founded by former antitrust lawyer Winston Weinberg and Gabriel Pereyra, a former AI research scientist who worked at Meta and Google DeepMind.