San Francisco office leasing jumps 49 percent on artificial intelligence demand

San Francisco office leasing reached 12.1 million square feet through the third quarter of 2026, Bisnow reported citing figures from Avison Young. This volume represents a 49 percent increase compared to the same period during the previous year. The expansion in commercial office space absorption is being fueled by rising demand from artificial intelligence firms operating within the market. [1]

During the third quarter of 2026 alone, the city recorded 3.9 million square feet of total leasing activity, according to figures from Savills cited by Bisnow. Commercial tenants in the market are increasingly looking to secure large continuous space blocks of 100,000 square feet or more. [1]

The demand for high-quality space has widened the divide between trophy properties and secondary office assets, according to panelists speaking at the Bisnow San Francisco State of the Market conference. Landlords owning top-tier office buildings are subsequently gaining increased pricing power over prospective tenants. [1]

San Francisco serves as a primary economic hub for the San Francisco Bay Area, which represents the second-largest combined statistical area in California with a population exceeding nine million people. The current leasing pace through the third quarter of 2026 puts the city on track for one of its strongest annual leasing totals in decades, Bisnow reported. [1][6]