Tech Hubs See Office Demand Rise as AI Funding and Hiring Accelerate
Office recovery in San Francisco, New York and Seattle is benefiting from a wave of artificial intelligence momentum, fueling demand for tech workers in real estate, finance, insurance and other industries to fill jobs that require full-time in-office work.
AI-related job postings account for 20% of all available U.S. tech openings as of June, double the percentage of such job openings posted in mid-2022 when tech jobs were peaking, according to a CoStar report analyzing CBRE data.
“The rapid development and adoption of AI is generating economic growth across major tech hubs like the San Francisco Bay Area, Seattle and Manhattan,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center, in a statement from the company. “These markets are receiving record amounts of venture capital funding and corporate investment in AI initiatives, which often results in hiring and future office demand.”
San Francisco was at the top of CBRE’s ranking for overall tech talent, followed by Seattle. The country’s biggest tech job gainers this year have been Orlando, Pittsburgh, and Raleigh-Durham, North Carolina.
Whether this AI-fueled momentum will ultimately lead to greater office leasing remains to be seen. Site Selection Group SVP Jeff Eiting told CoStar that AI company growth is “very fluid,” and that for every AI company growing, another is being acquired.
But in markets like San Francisco, where post-pandemic office vacancy remains above 30%, the technology is generating optimism. AI-related job postings increased to 42% of all tech job openings in San Francisco, up from 20% three years ago, CBRE said.
“AI is dominating the real estate conversations here,” said Caroline O’Loughlin, CBRE’s first VP in its San Francisco tech and media practice, during a briefing. “Roughly half of total AI funding invested in the United States is being deployed here. That’s an incredible concentration, and it’s having an impact on the real estate markets.”
To attract top tech employees, AI companies are highly focused on the office experience, according to O’Loughlin. CBRE is tracking 1.5 million square feet of office deals tied to AI demand with various timelines, with many high-profile deals expected to emerge by the end of this year and into next year, she said.
Source: GlobeSt/ALM