If you’ve spent any time in San Francisco lately, you can feel it — there’s a renewed buzz in the air. The cafes are fuller, the sidewalks are livelier, and for the first time in a while, there’s optimism pulsing through the city again.

A big reason? The AI boom.

Artificial intelligence companies are moving into San Francisco in full force, and they’re bringing energy (and employees) right along with them. This resurgence is quietly transforming both the commercial and residential real estate markets — and the data backs it up.

The AI Boom in the City by the Bay

In the past year, San Francisco has re-established itself as the epicenter of AI innovation. According to CBRE, AI-focused companies now occupy roughly 5 million square feet of office space in the city, and that number could surge to 21 million within five years.

A few big moves are leading the charge:

• Anthropic recently expanded its SoMa headquarters.

• Sierra Technologies is finalizing a 300,000-square-foot lease in China Basin.

• And familiar names like OpenAI, Scale AI, and Cognition Labs continue to grow their local footprints.

This leasing activity is giving new life to San Francisco’s office market — one that many thought might never bounce back post-pandemic. According to Axios, the Bay Area claimed 11 of the nation’s largest office leases in 2024, with AI firms driving much of that demand.

Ripple Effects on Housing Demand

Of course, all these new jobs (and office reopenings) have a ripple effect. Neighborhoods near AI hubs — think SoMa, Mission Bay, and Dogpatch — are seeing strong rental and buyer demand.

📈 The numbers tell the story:

• Rents for two-bedroom units have jumped over 16% year-over-year in some neighborhoods.

• Home sales in San Francisco rose 5% in 2025, even as nearby Bay Area markets softened.

• With just a 1.3-month supply of single-family homes on the market, demand is clearly outpacing supply.

Why AI Companies Are Choosing San Francisco Again

Despite its challenges, San Francisco still offers what no other city can: a deep talent pool, a world-class innovation ecosystem, and the kind of creative energy that fosters breakthroughs.

The Bay Area now hosts over 800 AI firms — more than triple New York City’s total. Many of these companies are embracing an office-first model (4–5 days a week in person), which means more people living, working, and spending time right here in the city.

All of this activity is breathing life back into local businesses, raising neighborhood vibrancy, and reestablishing San Francisco as the hub of cutting-edge innovation.

What This Means for Real Estate

For buyers, this could be a rare window of opportunity before prices push higher in AI-adjacent neighborhoods.
For sellers, limited inventory and renewed demand put you in a strong position.
And for investors, the rental market is once again showing signs of strength — especially near growing tech corridors like SoMa and Mission Bay.

While every market shift comes with nuance, the overall trend is clear: the city’s tech heartbeat is back, and with it, confidence in the future of San Francisco real estate.

In Summary

AI isn’t just changing technology — it’s changing San Francisco.
As these companies grow, they’re bringing new life, talent, and opportunity to our city. For those who have always believed in the long-term strength of San Francisco, this next chapter looks incredibly promising.

If you’ve been wondering how these shifts might affect your real estate goals — whether you’re buying, selling, or just keeping an eye on the market — I’d love to talk through it with you. No sales pitch, just an honest conversation about where things are heading.