Artificial intelligence could be the solution to helping San Francisco’s struggling downtown business district, a new analysis revealed.
The real estate analysis from CBRE presidcted that the AI-boom, which represents the third nig tech explosion during the last few deceased, will take up more office space than the dot-come era but less than the app economy era.
To reach that conclusion, CBRE compared the office footprint growth of all three tech booms.
Over the past five years, AI companies have leased more than 5 million square feet in San Francisco and are projected to take up 16 million more by 2030.
During the six years of the dot-com era, which began in 1995, office footprints grew to 11 million square feet and vacancy rates fell from 10% to 1%.
In the mobile app era, which brought the biggest impact, a growth of 31 million square feet lowered vacancy rates from 16% to 4%.
CBRE used venture capital funding as a predictor of market growth. The firm said it’s highly correlated with employment and office space growth.
AI companies have received more than $100 billion in VC funding, which is more than the other two tech eras combined.
“Artificial intelligence is just really getting started,” said Colin Yasukochi, executive director of CBRE’s tech insight center. “As an industry, we really saw its growth spurt happen over the last two years. And much of the growth is ahead of the AI industry. And so they’re in the office five-plus days per week. They’re adding many, many employees every week. And new AI companies are. You know, being created, you know, almost like on a weekly or monthly basis.”
San Francisco’s current office vacancy is at a historic high of over 35%. Even if predictions are accurate, the city would still be far away from the single-digit office vacancies of the past eras.
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