Andreessen Horowitz has inked a deal to expand its headquarters in California's Silicon Valley on one of the most expensive streets for office space in the country.

The venture capital firm that's focused on artificial intelligence companies has signed a nearly 34,000-square-foot lease at 2400-2450 Sand Hill Road in Menlo Park, according to a statement from landlord DivcoWest. The lease is a relocation from its current, 25,000-square-foot digs about a mile away in the city, in an area often billed as the Wall Street of the West Coast.

The expansion comes on the heels of a recent funding round by Andreessen Horowitz; the company in April raised $7.2 billion — exceeding its $6.9 billion goal — that it plans to use for investments in artificial intelligence companies prepping to go public.

Sand Hill Road is ranked by JLL as the most expensive street for office space in the United States, according to a recent report, with full-service asking rents of $167.74, beating out Hudson Yards in New York and Palm Beach in Florida.

“The epicenter for the rapidly growing AI industry, Sand Hill Road is home to some of the most prestigious venture capital and private equity firms that have remained highly active this year, driven largely by funding for generative AI companies,” the report said.

The nearly 6-mile stretch of Sand Hill Road is a hub for some of the nation’s largest venture capital firms that also includes Redpoint Ventures, Greylock Partners and Sequoia Capital.

Those venture capital firms, along with Andreessen Horowitz, have funded startups among the likes of Netflix, Airbnb and Lyft, some of the most successful startups in the past 20 years.

“Sand Hill Road is at the heart of Silicon Valley's venture capital ecosystem,” said Nigel Hughes, senior director of market analytics at CoStar group. “The businesses that take office space here funnel billions of dollars into technology startups and are an integral part of the success of the tech industry.”

Andreessen Horowitz's new headquarters is at The Quad office park, where office rents run some $126 per square foot, among the highest in Silicon Valley.

Despite fetching high rents, Menlo Park has not been immune to the tech retrenchment that's taken place throughout California's Bay Area in the wake of the COVID-19 pandemic. The city's office vacancy rate of 20% is higher than the 11% average last year and 3% in 2019.

In early 2023, Meta put up roughly 480,000 square feet of office for sublease in three buildings near its Bayshore campus in Menlo Park.

Menlo Park's average office rent of $75 per month is down from $100 in 2019, but still outpaces the Silicon Valley average of $54 and much of the rest of the country, according to CoStar data.

Rents in Silicon Valley are expected to further decline over the next few years and are not expected to see positive momentum until 2027, according to CoStar data.

Still, Sand Hill Road is likely to prove resilient due to its proximity to Stanford University and the Stanford Research Park, where many startups incubate, making it the “perfect location” for venture capital firms and companies that work with them, according to Hughes.