San Francisco is experiencing a shift as high office vacancy rates are softened by a surge in artificial intelligence startups. Major companies like Dropbox and Salesforce have reduced their presence, and others like Nordstrom have exited downtown. Yet, AI leasing activity has dramatically increased, with 167 leases in Q1 2025 compared to only two in 2020. This trend could lead to a decline in vacancy rates, as stated by JLL. Mayor Daniel Lurie expresses optimism about the city’s robust business ecosystem that supports AI growth.
"People wanted to count us out, and I think that was a bad bet. We're seeing all of this because the ecosystem is better here in San Francisco than anywhere else in the world, and it's really an exciting time."
"You need the talent base, you need the entrepreneur ecosystem, and you need the VC ecosystem. So all those three things exist within the greater Bay Area, and that enables us to be successful."
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