Oct 19, 2026 · 39 min
AI tenants revive San Francisco’s trophy offices
Turnaround: Inside San Francisco’s Office Revival
The episode examines whether concentrated AI demand can repair San Francisco’s office market despite high vacancy, aging buildings, and limits on redevelopment.
- 1AI companies are competing for well-located, amenity-rich trophy offices even as citywide vacancy remains elevated.
- 2The Spear and 301 Battery recast offices as hospitality-driven destinations built around wellness, collaboration, and flexible events.
- 3Sustaining the recovery will require progress beyond offices, including housing, hotels, retail, and redevelopment of obsolete buildings.
Don't miss
Cyrus Sanandaji explains how The Spear was transformed into an office resort designed around hospitality, wellness, social interaction, and tenant experience.
The brief
San Francisco’s office recovery is uneven: AI companies are competing intensely for trophy buildings while overall vacancy remains high, challenging the city’s lingering doom-loop narrative.
K. Cyrus Sanandaji and Conor Vermeulner explain how The Spear’s office-resort model uses hospitality, wellness, social spaces, and events to attract both smaller and larger tenants.
The conversation connects AI demand to neighborhood energy, hotel and restaurant access, intense workplace cultures, and a preference for creative settings that bring employees together.
At 301 Battery, a former Federal Reserve building in Jackson Square, historic architecture, outdoor decks, operable windows, and a tenant club support a different collaboration strategy.
The guests argue that falling effective vacancy will depend not only on AI leasing, but also on housing, retail, hotels, and the redevelopment of obsolete offices.
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