The surge of AI over the past year is helping to drive demand in the U.S. office market, especially in San Francisco and New York City, both of which outpaced the national market and experienced post-COVID demand peaks in August.
Year over year, office demand grew 39% in New York City and 107% in San Francisco in August, compared with a national average of 30%, according to a report by commercial real estate analytics firm VTS.
Driving the growth is demand from the tech sector, particularly AI-related tech. The two markets have become “premier hubs where the AI revolution is creating an immense appetite for commercial real estate,” VTS says.
More than driving demand, AI is changing how workplaces function, JLL says in a report.
Emerging AI solutions are seen as a way for building operators and occupiers to automate building systems and improve efficiency and energy performance, according to JLL’s 2025 Experience Matters report, which surveyed 12,000 respondents across 64 cities. How people access information about workspaces, how they book space and how they use the space are all changing based on AI tools tech companies are rolling out – “with a knock-on impact for people’s experiences in these spaces,” JLL says.
“All of a sudden you have this code that you can inject into your building, like a human body, to achieve what was impossible before,” Honghao Deng, CEO of AI technology firm Butlr Technologies, said in an interview.
Although sentiment toward technology and its role in buildings is “broadly positive,” there is some pushback, JLL says. Despite a strong preference for technology that enhances experience, there is growing interest in spaces without technology, JLL says.
Almost two-thirds of respondents in the JLL survey said they’re looking for space for “digital detox” – technology-free space, the company says.
Occupiers say they’re interested in low-tech collaboration spaces for innovation sessions and tech-free social spaces as contrasting options to enhanced audio-visual and hybrid meeting rooms, the report says.
