Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
Artificial intelligence companies emerged as the most influential force in the U.S. office segment of the commercial real estate market this year, driving a leasing rebound that few other sectors have been able to match. Their expansion helped lift occupancy to its strongest levels since before the pandemic and altered expectations for how — and where — office demand returns, according to CoStar.
Technology has played a similar role in past downturns, but the current cycle looks different. AI-focused firms are scaling faster, committing to larger footprints earlier, and showing a stronger preference for physical offices than many legacy tech peers.
An Office-First Growth Model
Unlike earlier waves of tech companies that moved heavily toward remote work, many AI firms have maintained an office-centered approach. Their need for close collaboration, specialized infrastructure, and rapid hiring has translated into sustained demand for high-quality space.
That approach is showing up most clearly in San Francisco, where AI leasing activity now exceeds that of other major U.S. markets. While average lease sizes remain below pre-2020 levels, the trajectory is moving upward as companies mature and funding accelerates.
Industry data shows a clear evolution: early-stage AI firms often begin with a few thousand square feet, then quickly scale into requirements five times that size as teams expand and products move toward commercialization.
A National Impact on Vacancy
What began in the Bay Area has spread nationwide. Cities that struggled with elevated vacancy rates are now seeing renewed activity as AI tenants pursue space in secondary and emerging tech hubs.
Across the U.S., office occupancy is rising at its fastest pace since mid-2019. Technology firms account for roughly 20% of all office leases signed this year, underscoring the sector’s outsized influence on the market’s recovery.
Major Deals Signal Long-Term Commitment
Several high-profile transactions illustrate how AI growth is translating directly into office demand:
Nvidia Expands Its Physical Footprint
The chipmaker added a full-floor office in San Francisco’s Mission Rock development, marking its first office presence in the city. The lease is part of a broader national expansion spanning California, Texas, and Oregon, with additional markets under consideration. Nvidia’s real estate investments align with expectations that global spending on AI infrastructure will continue climbing sharply through the decade.
Databricks Doubles Down in Silicon Valley
Databricks leased an entire building in Sunnyvale, totaling more than 338,000 square feet, shortly after expanding its San Francisco headquarters. The move supports a workforce that has grown quickly in recent years, with further expansion anticipated.
OpenAI Pushes Beyond Its Core Hub
OpenAI signed a lease in downtown Bellevue, Washington, backfilling space vacated by Microsoft. While modest in size, the deal reflects a broader strategy: establish large hubs in core markets, then expand outward as headcount increases. The company now occupies more than one million square feet in San Francisco alone.
Harvey AI Accelerates on Both Coasts
Harvey AI significantly expanded its presence in New York City and San Francisco, adding nearly 185,000 square feet across both cities in a matter of months. The pace of its leasing mirrors the rapid growth pattern increasingly common among AI startups transitioning into large-scale operators.
Anthropic Eyes an Entire Tower
Anthropic is in advanced talks to lease a full San Francisco office tower exceeding 400,000 square feet. The potential deal follows a series of recent expansions and would represent one of the clearest examples yet of an AI firm moving from multi-floor occupancy to full-building control.
What Comes Next
AI companies and their willingness to commit to large, long-term space suggests confidence not just in near-term growth, but in the durability of office-based work for advanced technology development.
As 2026 approaches, the office market’s trajectory may hinge less on a broad return-to-office mandate and more on whether AI’s growth curve continues to steepen. So far, the signals point upward.
