AI’s Impact On The Bay Area Could Help Parts Of The Office Market Rebound

The Bay Area's office vacancy issues may not be solved by artificial intelligence (AI), but experts predict that AI companies like Anthropic and OpenAI leasing substantial office space will buoy parts of the market. “There’s a lot of those tenants still in the market,” said Tony Natsis, Allen Matkins partner.

While the growth of the AI sector is expected to attract more companies and tenant interest over time, the current focus is on top-tier office buildings. Already, AI companies are occupying space in Mission Bay, the Embarcadero and neighborhoods that offer top-tier buildings with amenities, signaling a flight to quality, Natsis said.

This leaves buildings in a middle tier to compete and cater to the will of new tenants, and the ecosystem that forms, or else lose out. Natsis said this tier of Class-A buildings will likely bounce back with AI.

“I think AI will help the middle-tier buildings pretty dramatically,” Natsis said.

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