- US tech office leasing rose 21% year-over-year in Q1 2025, driven by AI growth and tighter in-office mandates from major companies.
- Markets like New York, Seattle, and Boston are benefiting alongside San Francisco, as tech companies seek talent clusters outside the Bay Area.
- AI-related firms have leased over 5M SF in San Francisco in the past five years and could add another 16M SF by 2030, potentially halving the city’s vacancy rate.
Artificial intelligence may be transforming how businesses operate, but it’s also reshaping where they work. After a multi-year slump in office leasing from major tech firms, the tide is turning, as reported by CoStar. Markets across the US are seeing increased leasing activity as AI-focused companies—and legacy tech names adapting to the AI wave—return to physical office expansion.
AI Is Driving A Tech Office Rebound
Nationwide, tech office leasing jumped to 7.9M SF in Q1 2025, up 21% from a year earlier, according to CBRE. Tech firms represented 16.4% of total leasing, a significant rise after bottoming out in late 2022. In San Francisco, tech tenants have accounted for 50% of leasing so far this year, while in New York, tech leasing activity is at its highest level since 2000.
The catalyst? A widespread surge in AI-related demand—from startups to tech giants and non-traditional tech adopters like Walmart and IBM. AI companies are actively seeking office space in core innovation markets such as Seattle, Boston, and Toronto, helping lift local activity.
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Return-To-Office Adds Fuel
Mandated in-office work and AI-driven growth are both fueling space demand. Amazon, for instance, has recently expanded its office presence in Manhattan and acquired its first NYC office property since 2020. The company has also grown in Miami and Dallas and partnered with flexible space providers like WeWork.
Leases Are Growing, But Cautiously
While demand is back, the market is still measured. Most tech leases fall between 10K and 50K SF, with fewer blockbuster deals. However, tech firms signed 29 of the 100 largest US office leases in 2024—up from just 11 the year prior—outpacing finance and insurance.
San Francisco Stands To Benefit Most
San Francisco has already seen AI-related firms lease over 5M SF since 2020. CBRE projects these companies could take another 16M SF by 2030—enough to potentially slash the city’s 36% vacancy rate by half, assuming stable occupancy from other sectors.
What’s Next
From OpenAI expanding in Bellevue to Walmart locking in more space in Silicon Valley, demand is poised to rise. However, a full return to pre-2020 expansion mode is unlikely in the near term. Companies remain cautious, balancing real estate decisions with cost control, workforce shifts, and talent availability.
Yet one thing is clear: the AI boom is already altering the geography of tech—and giving office markets across the US new life.
