- New York and San Francisco lead AI hiring, accounting for a combined 58% of all tech-related recruitment.
- Office demand in both cities has outpaced national levels, with San Francisco seeing a 107% annual jump and New York rising 33%.
- Tech’s role in office leasing has hit post-pandemic highs, with San Francisco’s tech-driven demand reaching 59% in August.
AI Drives A New Office Market Hierarchy
Artificial intelligence is breathing new life into the US office sector, reports GlobeSt. The impact is most visible in New York and San Francisco. These two metros have become focal points for AI hiring and office leasing, outpacing recovery trends seen elsewhere.
New data from VTS shows that New York and San Francisco now account for the majority of AI hiring in the US. San Francisco holds a 34% share, with New York close behind at 24%. The surge in hiring is translating into real estate momentum.
New York: Tech Adds Fuel To A Diversified Market
New York’s office demand is on the rise, climbing 33% year-over-year in August, according to the VTS Office Demand Index (VODI). The city’s leasing activity has grown 39% since late 2022, when generative AI tools began gaining traction.
Traditionally led by finance, insurance, and professional services, New York’s office market is seeing tech play a larger role. In August, tech companies accounted for 18% of office demand—the highest share in recent years.
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San Francisco: AI Pushes Tech Demand To New Heights
In San Francisco, tech’s influence on the office market is even more pronounced. Office demand rose 107% year-over-year in August and is up more than 350% since late 2022. Nearly 60% of all leasing activity in the city now comes from tech companies—higher than even the early pandemic boom.
With a dense concentration of AI startups and tech heavyweights, San Francisco is reasserting itself as a hub for innovation-driven office demand.
A National Contrast
While New York and San Francisco surge ahead, the national market tells a more tempered story. The overall VODI fell slightly in August—down 0.5% year-over-year—but remains up 13% compared to 2022 levels.
Why It Matters
The data underscores a shift in the office landscape: AI is not just a tech story—it’s a real estate one, too. As companies scale to meet demand for AI talent, they’re driving office leasing in cities that can support deep talent pools and innovation ecosystems.
For landlords and investors, this signals a growing divide: major tech cities are rebounding fast, while many other office markets continue to lag.
What To Watch
With AI continuing to reshape hiring patterns and corporate footprints, New York and San Francisco are positioned to stay ahead of the curve. Their strength in tech hiring and office leasing points to continued growth. AI-driven companies are increasingly looking for high-quality urban office space to support their expansion.
