Robotics Companies Have Exploded As Bay Area Office Users

The growing prevalence of artificial intelligence, and its ability to drive office leasing in the Bay Area, has caused related sectors to grow their spaces as well, according to new research from JLL.

Over the past six years, companies in the robotics and drone industries have increased their Bay Area footprint from less than 500K SF of office in 2020 to more than 7.6M SF in 2026, JLL researchers told Bisnow.

Robotics and AI-centric drone companies are expected to ink deals for an additional 1.5M SF in 2026 to be located in proximity to the nation’s epicenter for AI development, said Alexander Quinn, senior director of economic research for the Northwest region for JLL. 

“A lot of this [leasing activity] is driven by the convergence of robotics engineers, which are concentrated here, and AI talent in the Greater Bay Area,” he said.

The flurry of AI office deals in San Francisco in Q1 lowered overall availability by 2.5% to 31.7%, JLL noted. The nearly 770K SF of Class-A office space taken by AI companies drove positive net absorption of all office space to 1.6M SF, the strongest quarter in eight years, and dropped overall vacancy to 32.6%

The voracious demand for office space from generative AI companies such as Anthropic and OpenAI has led to the huge run-up in leasing from companies in physical AI, such as robotics and autonomous drones. Robotics firms primarily lease smaller flex office spaces in San Francisco, with larger industrial transactions occurring in the South Bay, JLL noted.

“Because of the concentration of AI talent within San Francisco, we are seeing leases in the southeast section of San Francisco — Dogpatch, Mission Bay, Potrero, Showplace Square, that is where we are seeing those robotics leases,” Quinn said.

Physical AI is much more than the humanoid robots under development by Tesla, Figure AI and others, which could exceed as many as 6 million units annually by 2030, a recent report by Boston Consulting Group said. 

As advanced AI robotics becomes more robust, it could eventually be the cornerstone of a vast range of industries designed for human workers, BCG said. Much of that early-stage development work is underway throughout the Bay Area.

“To make it work, you have to have both the robotics engineering professionals and the artificial intelligence software to be proximate to one another,” Quinn said. “You want a thinking machine that is able to figure out how to work in a mixed-asset environment and do a specific task. It’s really about those two things coming together.”

The South Bay has emerged as a hub for humanoid robotics development. Figure AI, founded in 2022 by tech entrepreneur Brett Adcock, last year opened a nearly 98.7K SF robotics campus at 3690 N. First St. in San Jose.

A few miles to the north, Tesla in Q1 initiated a serious push to produce its Optimus robot by leasing 375K SF of research and development space in Fremont’s Warm Springs District. In a conference call with analysts in January, Tesla CEO Elon Musk said a portion of the company’s 6.2M SF electric vehicle manufacturing facility in Fremont will be retooled to produce as many as 1 million Optimus robots each year.

Robotics companies in San Francisco typically occupy much more modest flex industrial spaces, Quinn said. Robotic food assembly manufacturer Chef Robotics leases nearly 20K SF in Showplace Square, while general purpose humanoid robotics maker Reflex Robotics occupies approximately 17K SF in SoMa.

As robotics leasing continues, it could strain the region’s availability of suitable flex and industrial spaces, JLL noted. Robotics companies that have advanced into pilot production typically require access to around 4,000 amps of power, Quinn said. JLL estimates that less than 10% of total industrial supply throughout the Bay Area can deliver that type of power capacity.

“We estimate around 2.5M SF of available space with that power,” Quinn said. “We should be OK in the very near term, but we are worried about a scarcity going into 2027 and ’28 unless more power comes online to some of these buildings.”

Forward-minded landlords are already scrambling to increase the power capacity to their buildings in an effort to be in prime position to offer space to the growing wave of robotics AI firms, he added.

“They know there is a premium associated with that,” Quinn said. “Owners recognize the value therein as well as the vacancy reduction associated with it.”