At a glance
- BXP's Hilary Spann said: “Demand is increasingly concentrated in the highest-quality buildings in the strongest urban locations.”
- For allocators comparing office funds, the useful check is the tenant roster of the specific assets in the fund and their AI and technology share, because demand is clustering by building rather than by submarket.
- Michael T. Cohen of Williams Equities named AI as one of the most important parts of the leasing recovery in Midtown South.
AI tenants are adding office space in New York and San Francisco, and the demand is concentrating in the best buildings, according to Commercial Observer's Owners 2026 questionnaire published Nov. 10.
BXP's Hilary Spann said: “Demand is increasingly concentrated in the highest-quality buildings in the strongest urban locations.” Clients are expanding as their businesses grow and office use increases, and some pandemic-era space cuts now look too deep, she added.
For allocators comparing office funds, the useful check is the tenant roster of the specific assets in the fund and their AI and technology share, because demand is clustering by building rather than by submarket.
Michael T. Cohen of Williams Equities named AI as one of the most important parts of the leasing recovery in Midtown South. The submarket's highly amenitized buildings draw technology companies and the broader creative industry, he said.
He said AI tenancy looks more durable than the dot-com boom, citing products, recurring revenue and business plans instead of “catchy URLs.” He expects an eventual culling of weaker AI startups, with survivors merging into larger companies.
Space taken by startups that do not survive would come back to the market, making the building-quality split more important to an office fund’s rent roll than the submarket average.
Demand is increasingly concentrated in the highest-quality buildings in the strongest urban locations.BXP's Hilary Spann
Reported by the Sectors desk from Commercial Observer. Published . Corrections