A newly flush AI infrastructure startup is making a major bet on Manhattan office space. Modal Labs has signed a lease for 156,673 square feet at 32 Avenue of the Americas, a sprawling commitment that lands just weeks after the company closed a massive funding round and crossed a major revenue milestone.
The lease was reported by CoStar, which covers commercial real estate news nationally. The building itself has some history behind it: constructed in 1913, the tower is associated with landlord Rudin, according to the same CoStar report. Building size estimates vary depending on the source — CoStar data puts the property at about 1.17 million square feet, while Real Estate Weekly has previously described it as a 1.2 million-square-foot office tower.
A Fresh War Chest Behind the Expansion
Modal's new footprint comes on the heels of a $750 million Series D funding round led by Accel, which valued the company at $15.75 billion post-money, according to Axios. In the same report, Axios said Modal's CEO, Erik Bernhardsson, told the outlet exclusively that the company had topped $1 billion in annualized run rate. Axios describes Modal as an AI infrastructure startup, and notes that valuations for AI-specific serverless cloud platforms like Modal and its peer Baseten have been climbing as companies race to lock down computing capacity.
Before this latest expansion, Modal already had a multi-continent footprint. The company operated offices in New York, San Francisco and Sweden and employed around 170 people, according to a report from Tech.eu. That same report said Modal had also been planning a London office in the Marble Arch area with room for up to 40 workers, joining what Tech.eu described as several North American AI firms that have recently announced new London office openings or expansions.
Manhattan's Office Market Is Riding an AI Wave
Modal's move fits into a much larger pattern reshaping Manhattan's office landscape. Leasing activity across the borough recently hit a 26-year high, according to the New York Business Journal, which reported that availability rates fell to 12.4% while average asking rents climbed. The outlet attributed most of the quarter's activity to technology and financial services firms.
AI companies specifically have become a major force in that surge. Manhattan recorded 1.7 million square feet of AI-related leasing in the first half of 2026, already exceeding the sector's combined total for 2024 and 2025, according to a report from Citybiz. AI tenants accounted for 8.2% of Manhattan's new office leasing during that stretch, up sharply from just 0.7% in 2020, the same report found. Citybiz also noted that the share of Manhattan AI leasing involving subleases fell to 17.9% in the first half of 2026, down from 42.3% between 2020 and 2024 — suggesting AI firms are increasingly signing direct, longer-term leases rather than taking over someone else's space. Average AI lease terms in Manhattan stretched to 90.9 months in the first half of this year, nearly double the 49-month average recorded in 2020, per Citybiz.
A Building With a Leasing Track Record
32 Avenue of the Americas has seen other sizable commitments in the past. Rudin finalized two leasing transactions totaling 72,000 square feet at the property in 2021, according to a report from Real Estate Weekly. That activity included a five-year, 66,753-square-foot lease with Cedar covering the entire 18th floor and part of the 17th floor, as well as a 5,148-square-foot expansion signed by private investment firm Dorilton Capital. Modal's new lease dwarfs those earlier deals, underscoring just how much space a well-funded AI infrastructure company can now command in a tightening Manhattan market.
