AI Boom Poised to Halve San Francisco Office Vacancy by 2030, Says CBRE

San Francisco's office market, long beleaguered by high vacancy rates, may see a significant turnaround driven by the burgeoning artificial intelligence (AI) sector. According to a recent report by CBRE, the influx of AI companies into the city is expected to cut office vacancy rates in half by 2030. 

The city's current office vacancy rate stands at a record 37%, with approximately 33 million square feet of vacant space. However, the AI industry's rapid growth is altering this landscape. AI firms have been responsible for a quarter of all leasing activity in San Francisco since last year, marking the sector as the primary driver of new office demand. 

Prominent AI companies, including OpenAI and Anthropic, have secured substantial office spaces in the city, signaling a commitment to in-person collaboration. This trend is further evidenced by the AI sector's office footprint in San Francisco, which has grown by 50% over the past year, reaching 3.6 million square feet. 

Industry leaders express optimism about this shift. Victor Coleman, CEO of Hudson Pacific Properties, noted improvements across West Coast markets, stating, "Nowhere is this more evident than in San Francisco," highlighting AI's role in revitalizing the city's office market. 

Looking ahead, JLL projects that the AI sector's office footprint in San Francisco could expand to 12 million square feet by 2030, up from less than 4 million square feet currently. 

This anticipated growth suggests a transformative impact of AI on San Francisco's commercial real estate landscape, potentially reversing the city's office vacancy challenges in the coming years.

Sources:

• "AI Could Cut San Francisco Office Vacancy by 2030 - The Real Deal" The Real Deal

• "Artificial Intelligence Leads Office Gains in San Francisco - The Real Deal