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Leasing & tenant law · Deals & development · 11/05/2026

AI firm Modal Labs leases 157K sq ft at Rudin's 32 Sixth Avenue

Modal Labs, an AI infrastructure company, signed a 157,000-square-foot lease across three floors at Rudin's 32 Sixth Avenue in Tribeca. Rent and lease length were not disclosed. The deal helps refill a tower that was 57 percent occupied and whose value was marked down to $340 million from $770 million in 2015.

Reported by The Real Deal · New YorkRead the original ↗

Photo: The Real Deal

What happened

AI infrastructure company Modal Labs signed a 157,000-square-foot office lease at 32 Sixth Avenue in Tribeca, a company spokesperson said. The building is owned by Rudin. The Real Deal reported the story on 11/05/2026. It noted that the deal first appeared in CBRE's Manhattan office report for 10/2026. The lease covers three floors of the 28-story, 1.2 million-square-foot tower. Asking rent and lease length were not disclosed.

Modal plans to move from Stellar Management's 233 Spring Street in mid-2027. The company has about 140 employees and is taking extra room for future growth. In 10/2026, Modal announced a $750 million Series D funding round at a $15.75 billion valuation. That came less than five months after a $355 million Series C.

The building has struggled with vacancies since the pandemic. According to Morningstar Credit, its value was marked down to $340 million in 12/2025. That is a 56 percent drop from a $770 million valuation in 2015. Fitch Ratings put occupancy at 57 percent in the most recent figure cited. Rudin got a four-year extension on its $425 million commercial mortgage-backed securities loan, pushing maturity to 11/2029, with two more one-year extension options. As part of that deal, Rudin committed $100 million to capital improvements. These include a renovated lobby, an on-site leasing center and upgraded ground-floor retail.

Rudin bought the former AT&T headquarters in 1999 for $150 million and later invested $100 million in it. The largest tenant is tech company Telx, with 146,000 square feet under a lease running through 2033. CBRE reported an average Downtown asking rent of $62.68 per square foot for 10/2026.

Key facts

Address
32 Sixth Avenue, Tribeca, Manhattan
Landlord
Rudin
Tenant
Modal Labs, an AI infrastructure provider with about 140 employees
Lease size
157,000 square feet across three floors
Move date
Mid-2027, relocating from 233 Spring Street
Building value
$340 million in 12/2025, down 56 percent from $770 million in 2015 (Morningstar Credit)
Debt
$425 million CMBS loan extended to 11/2029, with two one-year extension options
Downtown asking rent
$62.68 per square foot average, per CBRE's 10/2026 report

What it means

Landlords

This is a large commercial office deal, not a residential one. It does not change rules or costs for small residential landlords. It does show a big tenant taking space in a building that had low occupancy.

Buyers and owners

The building's value was reported at less than half its 2015 level before this lease. Owners of distressed commercial buildings can still land large tenants after a loan extension and a capital improvement commitment.

Tenants and voucher holders

Nothing in the reporting affects residential tenants, voucher programs or housing rules.

The highlights

  1. Modal plans to move from 233 Spring Street in mid-2027 and has about 140 staff.
  2. The 1.2 million sq ft tower was only 57 percent occupied, per Fitch Ratings.
  3. Rudin's $425 million loan now matures in 2029, with $100 million in upgrades pledged.

Why it matters Landlords

A large AI lease in a struggling Downtown tower shows tech demand can still help fill older NYC office buildings.

Not known yet

  • The asking rent and length of Modal's lease
  • Which three floors Modal will occupy
  • How much the lease raises the building's occupancy
  • The exact date of Modal's move-in

Background

Large Manhattan office buildings are often financed with commercial mortgage-backed securities (CMBS) loans. When a building loses tenants and value, owners frequently negotiate loan extensions with the loan servicer, sometimes agreeing to put new money into upgrades. Rating firms and data providers track these loans and report building valuations and occupancy, which is how such figures become public.

Summary written by Bulwark from The Real Deal · New York’s reporting. The original story is at therealdeal.com. This is general information, not legal advice.

Brooklyn, NY

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Photo: Andre Carrotflower, CC BY-SA 4.0
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