AI companies expand their office footprints, questions are emerging about whether the sector’s rapid growth could create another technology-driven real estate cycle. The expansion comes as the broader U.S. office market continues to recover, raising questions about the sustainability of AI-related leasing, the financial stability of emerging tenants and the potential for oversupply.
Unlike the life sciences expansion, which fueled specialized laboratory construction before demand slowed, AI companies are largely absorbing existing office space. That distinction could help limit oversupply risk, although landlords must still evaluate tenant creditworthiness, lease structures and long-term space requirements.
In an interview with IREI, Jacob Rowden, research director at JLL, and Alexander Quinn, executive director of Northwest California research at JLL, discuss AI’s role in the office market recovery, the differences between AI and life sciences leasing, and how lan
