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AI is impacting the whole lot, so it ought to come as no shock that demand for AI-specific tech expertise in sure cities is fueling actual property demand in workplace, residential and even retail.
Throughout the U.S. and Canada, the pool of tech employees with AI abilities grew by greater than 50% from mid-2024 to mid-2025 to 517,000 employees, based on a CBRE evaluation of LinkedIn information. That expertise is concentrated most within the San Francisco Bay Space, New York Metropolis, Seattle, Toronto and Washington, D.C. The highest three account for 35% of the nationwide whole.
Wanting simply at progress, the New York metropolitan space added probably the most AI tech expertise over the previous 12 months by absolute numbers (with 20,000 new AI-skilled employees). Atlanta, Chicago, Dallas-Fort Price, Toronto and Washington, D.C., every noticed 75% year-over-year good points in these employees — or extra.
Not all of this progress is new jobs however some is new abilities, as tech employees upskilled their capabilities to carry out AI-related duties and methods growth. Some, although, entered the workforce with these abilities.
“With this AI revolution, it has been a elementary recreation changer for the town of San Francisco, as a result of that is actually floor zero for the AI revolution and the place most of those main high-profile corporations like OpenAI are positioned,” mentioned Colin Yasukochi, govt director of CBRE’s Tech Insights Middle.
Silicon Valley was, in fact, the preliminary coronary heart of the tech sector, however AI seems to have longer limbs, reaching into cities and sectors the place fundamental tech is now retreating. A part of that’s as a result of AI tech expertise is now in excessive demand by the so-called FIRE group – monetary companies, insurance coverage and actual property. That is why Manhattan is seeing a lot extra workplace and residence rental demand.
Monetary companies firms are having to up their recreation as a result of fintech firms have gotten much more aggressive out there, due to AI. Whereas the general tech trade has in the reduction of, monetary companies have been a few of the prime hirers of AI expertise.
In contrast to another kinds of tech, which has gone extra distant, AI continues to be in its early innovation levels. That has a direct affect on how tech expertise operates. Within the first half of 2025, tech firms accounted for 17% of whole U.S. workplace leasing exercise, up from 10% in late 2022.
Simply within the metropolis of San Francisco alone, over the past 2½ years, 1 out of each 4 sq. ft of workplace house was leased by an AI firm, based on CBRE.
“AI is predominantly in-office work, and so they’re form of again to the sooner days of tech innovation, the place they’re within the workplace 5, six days every week and for lengthy hours,” mentioned Yasukochi. “That is actually boosted workplace house demand.”
The in-migration of expertise to those tech markets additionally has a large affect on residential actual property, based on the CBRE report, which reveals that residence rents have elevated in all the prime AI tech markets.
The residence lease progress from 2021 to 2024 in Manhattan was extra than14%, in D.C. extra than12%, in Seattle above 7% and in San Francisco practically 6%.
A part of that’s as a result of tech salaries in AI can cowl the price of rents in a lot of the highest price markets, which CBRE bases on the affordability commonplace of 30% of earnings to housing.
In Manhattan, the place residence rents are highest, tech employee salaries are such that employees are paying simply 29% of their wages on lease. Within the San Francisco Bay Space and in D.C. it is as little as 19%.
“This concept that AI is clearly the way forward for expertise, that it is simply sort of getting began, it is nonetheless comparatively early days – it is one other potential tech growth, and that is driving folks to return to cities the place that is taking place, and that is affecting the true property markets,” mentioned Yasukochi.
