SV Office Growth Spikes

Silicon Valley just put up another quarter of office growth even though the region is still carrying a 14.8 percent vacancy rate, which tells you the comeback is coming from a narrow slice of tenants rather than a broad return of everyone at once. Colliers counted 436,479 square feet of net absorption in the first quarter of 2026, the sixth straight quarter of occupancy gains. (colliers.com) A simple way to read “net absorption” is this: more space got occupied than emptied out. In Silicon Valley that math flipped positive because a few very large artificial intelligence leases were big enough to outweigh the move-outs still happening elsewhere. (colliers.com) The biggest swing came from OpenAI taking roughly 447,000 square feet in Mountain View across a five-building campus. The Real Deal reported that the deal gives OpenAI room for about 1,800 to 2,200 workers, which is the kind of single lease that can move an entire quarterly market report. (colliers.com) (therealdeal.com) That matters because Silicon Valley office demand is no longer being set mainly by the old giants trimming space. It is being set by newer artificial intelligence companies that are hiring fast enough to need whole floors, whole buildings, and in OpenAI’s case an entire campus. (therealdeal.com) (costar.com) You can see the same pattern in smaller but still meaningful deals. Glean, which says it has surpassed $200 million in annual recurring revenue, has been part of the wave of enterprise artificial intelligence firms taking new Bay Area offices as they grow from startup size into larger operating teams. (glean.com) (therealdeal.com) This is also why the rebound looks selective instead of uniform. JLL says San Francisco now has more than 260 active artificial intelligence leases totaling over 7.5 million square feet, while trophy offices are tightening faster than the rest of the market because the best-funded tenants want the best buildings. (jll.com) (therealdeal.com) The South Bay and San Francisco are feeding each other here. OpenAI has expanded in San Francisco’s Mission Bay and then pushed south into Mountain View, which suggests companies are no longer choosing between the city and Silicon Valley so much as building a Bay Area footprint that covers both. (therealdeal.com 1) (therealdeal.com 2) The counterpoint is that the market is still uneven. Mountain View alone had more than 12 million square feet of office space available for rent as of late 2025, and Google has continued consolidating some of its own footprint, so one company’s expansion is still offsetting another company’s retreat. (therealdeal.com 1) (therealdeal.com 2) That is why this quarter is more interesting than a plain “office is back” story. The Bay Area is turning into a market where artificial intelligence demand is strong enough to lift headline numbers even while vacancy stays high, which means landlords with newer, better space are seeing a very different world from owners of older buildings. (colliers.com) (jll.com) If that hiring wave keeps going, the next sign will not be vacancy suddenly disappearing across the whole region. It will be more quarters like this one, where a handful of artificial intelligence tenants keep soaking up the best space first and drag the broader market upward behind them. (colliers.com) (costar.com)