#ai demand

San Francisco Office Recovery Is Real but UnevenRecovery has begun to register in San Francisco’s office market, but the improvement remains narrow and unstable.Vacancy slipped from 34.4% to 34.2% in Q4 2024, the first quarterly decline in five years. By Q1 2026, vacancy improved to 28.0%, yet earlier readings near 36.9% in Q3 2025 showed how fragile conditions remained. In Q1 2025, total vacancy still climbed to 36.6%, underscoring the market’s uneven recovery.Recovery Concentrates in Select DistrictsPositive absorption appeared in Q4 2024 and strengthened to roughly 800,000 square feet in Q1 2026. Similar to San Diego multifamily, stable rental demand can coexist with weak transaction volume, highlighting how occupier strength does not always translate into broad investor confidence.Still, gains were concentrated in Showplace Square/Potrero Hill, Mid-Market, South of Market, and parts of the South Financial District.That pattern reflects neighborhood bifurcation and tenant polarization. The Financial District, which holds nearly two-thirds of city inventory, remained a drag as North Financial District vacancy rose.Leasing improved materially, but citywide emptiness stayed high overall.What’s Driving San Francisco Office DemandFueling the latest leasing wave, AI and frontier-tech firms have become the dominant force in San Francisco office demand.Their expansion lifted quarterly leasing above 3.4 million square feet, while AI migration helped concentrate talent, capital, and occupiers in the city.AI tenants already occupied about 7 million square feet, or 12% of total leased space, underscoring their unusually large footprint.Attendance Recovery Reshapes DecisionsReturn-to-office mandates and hybrid-work normalization also strengthened demand by raising office traffic and supporting more consistent in-person collaboration.That attendance recovery translated into stronger tenant requirements, with citywide demand rising sharply year over year and surpassing pre-pandemic averages.Broader Buyer Pool EmergesVenture capital, finance, and legal users added momentum.At the same time, amenity preference pushed tenants toward newer, sustainable, higher-quality buildings at rising asking rents.Elsewhere on the West Coast, policies such as Seattle’s rent cap legislation are reshaping real estate investment strategies and highlighting how regulation can influence property demand.Where San Francisco Office Leasing Is StrongestLeasing strength has clustered in a handful of submarkets. The Financial District and South Financial District have absorbed the largest share of recent demand.Mission Bay, China Basin, and select core waterfront corridors are also capturing growth from specialized users.The Financial District remains the city’s broadest leasing hub. It is supported by financial services, AI, and technology tenants seeking prestige, neighborhood branding, and transit accessibility.South Financial District accounted for nearly all positive net absorption in early 2025.Growth NodesMission Bay and China Basin continue to attract life sciences, biotech, and AI firms. They benefit from UCSF proximity and newer amenity-rich buildings.Along the Embarcadero, established firms still favor central waterfront addresses. Strong transit accessibility and visibility continue to support demand.SoMa, Dogpatch, Potrero Hill, and the Presidio also participate through smaller, flexible deals. These areas appeal to creative users and downsizing tenants.How Rents and Vacancy Split by Building QualityAcross San Francisco, the office market is dividing more sharply by building quality. Top-tier assets are holding pricing power, while older space absorbs the strain of elevated vacancy.Tenant preferences continue to favor newer, amenity-rich towers. Demand is especially concentrated in submarkets around the Financial District and premier CBD blocks.Trophy buildings reached asking rents of $103.76 per square foot. Top floors in prime towers climbed to $134.77.

Microsoft may soon raise the prices of its Xbox Series X and Series S consoles again due to a global shortage of DRAM and GDDR memory chips. This comes after recent price increases for both the consoles and the Game Pass subscription, reflecting mounting supply pressures on key hardware components. Memory Shortage Hits Gaming Hardware According to Moore’s Law is Dead (MLID), Microsoft is facing…

Malaysia’s trade performance strengthened in October 2025, with total trade rising +13.6% year-on-year, marking the second consecutive month of double-digit expansion. The improvement was driven by a sharp rebound in exports, which accelerated to +15.7%yoy, while imports grew +11.2%yoy, the fastest pace since April. Exports Surge Manufacturing remained the backbone of export activity,…