Tech companies and artificial intelligence upstarts have unleashed a South Bay leasing surge that has produced the region’s best quarter for office space rental activity since the end of the coronavirus outbreak, a new report has disclosed.

The upswing is strong enough that the tech industry is filling up an array of empty office spaces in the region in a hopeful sign for the local market, Savills, a commercial real estate firm, reported. The survey covered the January-through-March first quarter of 2026.

The rental surge has begun to chip away at the region’s office availability rate, a broad measure of the empty or unwanted office space in the region.

“The Silicon Valley office market recorded a post-pandemic high of 3.2 million square feet in quarterly leasing” in the first quarter, Savills reported.

That was more than double the 1.5 million square feet in office space leasing during the prior October-through-December fourth quarter in the South Bay, according to the Savills survey.

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The South Bay availability rate was 22.6% in the first quarter of 2026, Savills reported. The availability rate is a combination of spaces that are empty and being offered directly for lease, spaces that are offered for sublease, and spaces that will soon be empty because the tenant is exiting the site or downsizing.

The latest availability rate was notably lower than the 24% availability level during the fourth quarter of 2025 and a big improvement from the 26.8% level that Savills reported for the South Bay in the first quarter of 2025.

Big deals from fledgling tech dynamos such as artificial intelligence firm OpenAI, which leased several office buildings in Mountain View on Ellis Street totaling roughly 439,000 square feet, help lead the rental upswing in the South Bay.

The leasing jump included veteran tech firms such as Infineon, which leased 219,200 square feet in north San Jose at 6001 America Center Dr.

Artificial intelligence firm Databricks has leased large office spaces in downtown Sunnyvale, consisting of 200 West Washington Ave. and 250 West Washington Ave., along with another 180,400 square feet at 100 Altair Way.

Another AI company, Crowdstrike, has leased 150,000 square feet at 250 West Washington in downtown Sunnyvale.

Pinterest, a social media company, struck a deal to rent 124,900 square feet at 285 Sobrante Way in Sunnyvale, according to Savills.

Astera Labs leased 69,800 square feet in an expansion at 2315 North First St. in north San Jose.

While leasing activity has strengthened, overall availability remains near historic highs, indicating that a fully balanced office market is still some distance away,” Savills stated in its new report.