{"id":99929,"date":"2025-12-18T18:07:30","date_gmt":"2025-12-18T18:07:30","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/99929\/"},"modified":"2025-12-18T18:07:30","modified_gmt":"2025-12-18T18:07:30","slug":"san-francisco-office-leasing-sees-strong-q4-amid-ai-boom-commercial-observer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/99929\/","title":{"rendered":"San Francisco Office Leasing Sees Strong Q4 Amid AI Boom \u2013 Commercial Observer"},"content":{"rendered":"

It\u2019s been yet another successful quarter for office leasing in San Francisco, driven largely by a wave of artificial intelligence firms<\/a> \u2014 and cryptocurrency firms \u2014 seeking new space.<\/p>\n

Year-to-date, leasing activity stands at 8.4 million square feet in the City by the Bay \u2014 already larger than last year\u2019s total of 8.3 million square feet \u2014 with final 2025 numbers expected to exceed more than 9 million square feet, according to a recent report from JLL<\/a>.<\/p>\n

SEE ALSO: Law Firm Thompson Coburn Renews 46K-SF Lease at 488 Madison Avenue<\/a><\/p>\n

Plus, of the total number of lease transactions accounting for more than 50,000 square feet, 33 percent were growth- or expansion-driven, the report found. The majority of those growth deals were from AI firms, but crypto firms were involved as well, JLL said.<\/p>\n

\u201cAI activity has re-anchored the city\u2019s office fundamentals and created a new baseline for what healthy demand looks like,\u201d Chris Roeder, JLL\u2019s executive managing director, said in a statement to Commercial Observer.<\/p>\n

\u201cWhat we\u2019re seeing now is a re-centering of the city around a new generation of growth companies that are taking real space, expanding headcount and making long-term commitments to the market,\u201d Roeder added.<\/p>\n

Recent AI leases signed in San Francisco include health care revenue management company R1\u2019s 12,453-square-foot deal at 140 New Montgomery Street for its new AI lab\u2019s headquarters, as CO previously reported<\/a>. There were also some bigger deals earlier in the year, including workforce management company Rippling<\/a>\u2019s 123,000-square-foot lease at 430 California Street, and AI software company Databricks<\/a>\u2019 150,000-square-foot deal at 1 Sansome Street.<\/p>\n

As for crypto firms, Coinbase<\/a>, the country\u2019s leading cryptocurrency exchange, signed a lease in May<\/a> for 150,000 square feet at 1090 Dr. Maya Angelou Lane in the city\u2019s Mission Rock neighborhood.<\/p>\n

\u201cThe momentum we\u2019re seeing shouldn\u2019t be viewed as a routine upswing,\u201d Roeder said. \u201cSan Francisco is reorganizing around a new class of AI-driven growth companies, and it is a structural shift that\u2019s helping reset the trajectory of the city\u2019s office sector.\u201d<\/p>\n

San Francisco also saw its total vacancy fall to 34.4 percent quarter-over-quarter. The number is expected to decline further through the end of 2026, largely because an increase in leasing activity impacts vacancy numbers about two quarters later, according to JLL.\u00a0<\/p>\n

San Francisco\u2019s market is also seeing tightness for office space in the city\u2019s residential neighborhoods such as Mission Bay, Showplace Square, North Waterfront and Jackson Square.<\/p>\n

In addition, total availability in the city stands at just under 30 million square feet, a decrease of 3 million square feet since the first quarter of 2025, JLL said. And total sublease availability is at 5.3 million square feet, the lowest number since the second quarter of 2020.<\/p>\n

It seems like all the momentum is set to continue throughout the next year, as San Francisco continues to see stabilizing demand, declining vacancy rates and a focus on AI firms, according to JLL.<\/p>\n

Isabelle Durso can be reached at idurso@commercialobserver.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s been yet another successful quarter for office leasing in San Francisco, driven largely by a wave of…\n","protected":false},"author":2,"featured_media":99930,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[54510,54511,54512,8815,54513,37662,54509,101,103,102,104,106,105],"class_list":["post-99929","post","type-post","status-publish","format-standard","has-post-thumbnail","category-san-francisco","tag-1090-dr-maya-angelou-lane","tag-140-new-montgomery-street","tag-430-california-street","tag-channel","tag-chris-roeder","tag-leases","tag-office-leases-1-sansome-street","tag-san-francisco","tag-san-francisco-headlines","tag-san-francisco-news","tag-sf","tag-sf-headlines","tag-sf-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/99929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=99929"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/99929\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/99930"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=99929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=99929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=99929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}