San Francisco’s office market is seeing a surge of activity in 2025, with artificial intelligence firms at the center of the rebound. Leasing volumes have climbed to their strongest levels since before the pandemic, signaling renewed demand in a city many had written off as struggling with vacancy and remote-work challenges.
AI companies are leading the charge. OpenAI, Anthropic, and legal tech startup Harvey have all expanded their footprints downtown. Harvey, for example, is upgrading from roughly 30,000 square feet to more than 90,000 square feet at 201 Third Street. Analysts expect that by 2030, AI tenants could occupy 12 to 15 million square feet in the city.
Alan Krawitz notes that this growth reflects a broader trend: high-performing tech firms are willing to pay for premium office space, even while much of the city’s lower-quality inventory remains underutilized. The demand is uneven, but for developers and landlords catering to top-tier tenants, the outlook is brighter.
One of the boldest signals of renewed confidence comes from Hines, which has proposed a 1,225-foot tower at 77 Beale Street, the former PG&E headquarters site. If built, the 76-story project would become the tallest building on the West Coast, adding 1.6 million square feet of Class A office space, residential units, retail, and public amenities.
Of course, challenges remain. Vacancy rates hover above 20%, and hybrid work continues to reshape how space is used. But as Alan Krawitz emphasizes, the return of big-ticket leasing and visionary proposals shows that San Francisco is entering a new cycle—one defined not by pandemic decline, but by innovation and selective growth.
For the city and the industry, the lesson is clear: while the office market may never look like it did before 2020, AI firms are giving San Francisco a new lease on life.
Source: Wall Street Journal – San Francisco Office Market Comeback
Leave a Reply