AI Fuels San Francisco Office Building Revival With A Proposed 1,225‑ft Office Skyscraper

Office leasing is back.

Sort of.

But deals are closing.

And a 1,225-foot skyscraper might rise in the middle of it all.

Yes, we’re talking about San Francisco—the city you thought was dead and buried under kombucha kegs and crypto regrets.

But in 2025, the numbers are shifting.

And AI is leading the comeback tour.

In 2025, San Francisco saw its office leasing volume bounce back to 5.1 million square feet, matching pre-pandemic numbers.

Artificial Intelligence companies like OpenAI and Harvey are leasing up nearly 1 million square feet of office space this year alone.

Enter Hines—a global real estate developer—proposing the tallest office building on the West Coast: a 1,225-ft skyscraper at 77 Beale Street.

It’s bold, risky, expensive—and could permanently reshape the skyline.

Don’t underestimate how fast AI companies are expanding.They’re not just hiring engineers—they’re leasing buildings.

In fact, projections suggest AI could lease 12–15 million square feet of space in San Francisco by 2030.

With that kind of momentum, developers see green.

Despite the AI rush, San Francisco’s office vacancy rate is still 22.8%—more than 3x the pre-COVID levels of 2019.

Entire floors remain dark in SoMa.Downtown foot traffic is spotty at best.And remote work? Still thriving.

Which makes the Hines proposal a bit of a moonshot.

Forget 2019 pricing.

In this market, office towers are going for discounts as deep as 76%.

Blackstone recently purchased a 25-story tower for $265/sq ft, well below its historical valuation.
Another developer snagged a full downtown complex at pennies on the dollar.

The logic?

Buy low, bet on AI-fueled recovery, and reposition for the next boom cycle.

It’s either genius or delusional. Likely both.

Let’s talk about the big one.

Hines wants to build a 76-story tower, offering:

But there’s a catch:The project exceeds current zoning height limits (capped at 400 ft).

To proceed, it needs a Special Use District approved by city officials.

And if you’re wondering how these zoning powers work in Los Angeles, here’s your cheat sheet.

Here’s how it looks on paper:

Site: Former PG&E headquarters
Height: 1,225 feet, which would make it SF’s tallest building
Design: Sleek, glassy, hyper-modern, and mixed-use
Timeline: Still in pre-approval phase, contingent on city planning and environmental reviews
Politics: Backed cautiously by Mayor Daniel Lurie, but some critics say it’s too much, too soon

They’re not just betting on recovery.

They’re betting on a tech-powered vertical future.

Which is definitely more grounded than people buying land in Decentraland. We wrote about that wild trend too.

AI firms are driving the office comeback—track their leases as market indicators.
Investors are buying buildings at steep discounts, banking on long-term value.
Major development proposals are back, but face zoning and public scrutiny.
Permitting requirements like Special Use Districts are now central to project feasibility.
Office-to-residential conversions are still active—but they won’t replace towers like 77 Beale.