AI funding is flooding leasing
Foundational AI startups pulled an estimated $297 billion in Q1, and that capital is translating into aggressive space bids — big AI firms are snapping up trophy offices and contiguous blocks. The funding surge is already reshaping leasing dynamics in San Francisco and recalibrating investor appetite for premium office assets. (nytimes.com)
Flux committed to San Francisco space with a reported 38,000-square-foot lease at 340 Bryant Street, converting a fully vacant building into roughly 60% occupancy. (therealdeal.com) Together AI is negotiating roughly 150,000 square feet at 2 Henry Adams while robotics firm Physical Intelligence is close on a roughly 60,000-square-foot Airbnb sublease at 808 Brannan, moves that would assemble block‑size footprints in Showplace Square. (hoodline.com) Big-name tenants are taking trophy blocks too: Databricks agreed to about 150,000 square feet at One Sansome, Notion signed a 114,646-square-foot headquarters lease at the Monadnock Building, and Zyphra is moving into Salesforce Tower. (costar.com) Capital is driving buyer activity — REALM and Cannae Partners acquired 340 Bryant for about $10 million in January 2026 and immediately marketed it to AI and R&D users. (prnewswire.com) Market metrics reflect the shift: Savills reports San Francisco leased about 3.8 million square feet in Q1 2026, its strongest quarterly leasing since 2014, while CBRE recorded a 32.8% overall vacancy in Q4 2025 as net absorption turned positive. (research.euro.savills.co.uk) Landlord and brokerage playbooks have adjusted — listings now emphasize contiguous floor plates, high-capacity electrical infrastructure and lab/R&D zoning (features highlighted in 340 Bryant’s marketing and 2 Henry Adams’ availability), aligning asset pitches with AI tenant needs. (prnewswire.com)
