Robotics drives office demand
- Bay Area downtowns still show very high office vacancy rates despite some renewed tech leasing activity. (mercurynews.com) - Robotics and drone companies are projected to lease roughly 1.5 million square feet in the Bay Area this year. (bisnow.com) - Separately, DataBank landed a $2 billion loan to build three inference‑focused data centers, signaling big suburban infrastructure bets. (dallasnews.com)
Robotics companies are becoming one of the clearest sources of new Bay Area office demand, even as downtown vacancy remains stubbornly high. (bisnow.com, mercurynews.com) JLL projects robotics and drone companies will lease about 1.5 million square feet in the Bay Area in 2026, according to Bisnow’s report on “physical AI” tenants. Separate reporting says Bay Area robotics firms already occupy about 7.6 million square feet across more than 220 leases, up from less than 500,000 square feet in 2020. (bisnow.com, therealdeal.com) These tenants are not just writing software. They build machines, test hardware and store equipment, so they often need a mix of office, research and development, and light industrial space rather than a few desks in a tower. (bisnow.com) That demand is showing up unevenly across the region. The San Francisco office market ended the first quarter of 2026 with a 30.4% vacancy rate, while Mercury News reported that the Bay Area’s three main downtowns were all above 30%. (cbre.com, mercurynews.com) Outside the urban core, some markets look healthier. Cushman & Wakefield put East Bay Oakland office vacancy at 27.4% in the first quarter, and Silicon Valley office vacancy at 18.8%, while Colliers reported 436,479 square feet of net absorption in Silicon Valley for the quarter. (cushmanwakefield.com, cushmanwakefield.com, colliers.com) The pattern fits a broader real estate shift around artificial intelligence. CBRE said in February that the current wave of AI investment is sending money not only into offices for engineers, but also into “actual physical infrastructure” tied to computing and hardware. (cbre.com) That infrastructure buildout is spreading beyond the Bay Area. DataBank said this week it secured a $2 billion construction loan for the first three of eight planned data centers at its 300-acre Red Oak campus south of Dallas. (dallasnews.com) The loan is earmarked for inference-focused data centers, which are facilities designed to run trained AI models for live use rather than to build them from scratch. In practice, that means more suburban campuses with heavy power, cooling and land needs, even as older downtown office districts keep searching for tenants. (dallasnews.com, cbre.com) For Bay Area landlords, the rebound is real but narrow: robotics, drones and other hardware-heavy AI companies are leasing space, yet they are not filling every empty floor in San Francisco, Oakland or San Jose. (bisnow.com, cbre.com, mercurynews.com)
