The artificial intelligence boom could cut San Francisco’s 36 percent office vacancy rate in half.
That’s what experts at CBRE predict for the tech hub in the next five years. A new report from the commercial real estate firm explains that AI companies could expand into as much as 21 million square feet of office space by 2030, the San Francisco Business Times reported.
It would be a quadrupling from the 5 million square feet that AI companies currently occupy across San Francisco. That figure was just 1.7 million square feet last summer before ballooning to 5 million earlier this year.
“AI is a big deal, every bit as big as mobile was to the recovery during the post-financial crisis,” Colin Yasukochi, executive director of CBRE’s tech insights center, told the Business Times. “When you talk to venture capitalists, they will tell you this is still in the early innings.”
Case in point: AI has brought San Francisco $103 billion in venture capital funding over the past five years — more than what it raked in during its last two tech booms combined.
AI companies’ expansion and accompanying hiring frenzy could bring 50,000 to 60,000 new jobs to the city, Yasukochi said. “The most exciting part of this is the job creation,” he told the Business Times. “It could fundamentally change the vibrancy of downtown.”
Consider fledgling AI startup Sierra at 235 2nd Street. The company had approximately 30 employees when it signed its first lease in the building last summer. In February, Sierra signed a new lease doubling its office footprint, and quadrupling the company headcount.
Data from Paramount Group shows that more than half of the AI-focused tenants that signed leases from January through March were new to the market, according to the Business Times.
Downtown and South of Market is preparing for the predicted influx of workers.
Strada Development Group, for example, is proposing two mixed-use high-rises at 88 Bluxome Street in Central SoMa, which would take advantage of new zoning rules designed to revitalize the area with more housing.
— Chris Malone Méndez
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