AI firms are signing big SF leases

San Francisco’s office market is no longer just stabilizing. It is being pulled forward by a narrow, powerful force: AI companies that want real offices, close to one another, in the old downtown core. JLL says San Francisco recorded 143 AI-related leases totaling about 2.0 million square feet, more than any other city in the world, while total available office space in the city fell by nearly 3 million square feet over the past four quarters. (jll.com) That shift is easiest to see on a few blocks of Howard Street. Anthropic had already taken roughly 240,000 square feet at 500 Howard in 2023 and another 100,000 square feet at 505 Howard last year. In January, it leased the entire 300 Howard tower, more than 400,000 square feet, with plans to move in during 2027. Now it has added another 100,000 square feet at 400 Howard, extending a campus-like cluster across the street rather than betting on one isolated headquarters. (therealdeal.com) That matters because San Francisco still has a lot of empty office space. The city’s own vacancy dashboard shows vacancy remains far above its pre-pandemic floor of 4.7 percent in the second quarter of 2019. This is not a story about scarcity across the whole market. It is a story about demand concentrating in the best buildings, in the most connected part of town, from companies that are growing fast enough to care more about adjacency than bargains. (sf.gov) Anthropic is a vivid example because its headcount and revenue have both exploded. SFGATE reported in January that the company had grown to more than 2,500 employees, and that its revenue run rate had jumped from $87 million at the start of 2024 to above $9 billion by the end of 2025. A company moving that fast does not lease hundreds of thousands of square feet as a branding exercise. It does it because hiring, security, computing operations, and management all become physical problems at the same time. (sfgate.com) The hiring picture helps explain why brokers are watching this so closely. The Indeed software development postings series, published through the St. Louis Fed’s FRED database, stood at 71.02 on March 20, 2026, after updating on March 26. The card’s claim is that software-engineering openings are now at a three-year high. Even without leaning on that exact phrasing, the direction is clear: software hiring has revived enough to show up in national postings data again. When that happens in San Francisco, it usually starts with startups and fast-growing teams taking smaller suites before it shows up as tower-sized leases. (fred.stlouisfed.org) That is why the big Anthropic deal is more than one tenant getting bigger. CBRE argued last year that AI had already become a major office-demand engine in San Francisco, with AI companies leasing more than 5 million square feet in the city since 2020. Its 2026 outlook then described the Bay Area as showing early signs of stabilization as innovation sectors accelerated. The new leases suggest the market has moved beyond “early signs.” Demand is not broad yet, but it is real enough to absorb space, tighten availability, and make one stretch of Howard Street look like the physical map of the AI boom. (cbre.com)