AI Talent Surge Drives Real Estate Demand in Key US Cities
A critically important increase in Artificial Intelligence (AI) tech talent is reshaping real estate markets across the United States, notably in major metropolitan areas. Recent data indicates a concentrated growth in AI-skilled workers, with the top three cities accounting for 35% of the national total.
Over the past year, the New York metropolitan area experienced the largest absolute increase in AI talent, adding 20,000 new workers. Atlanta, Chicago, Dallas-fort Worth, Toronto, and Washington, D.C.each saw year-over-year gains of 75% or more in AI-skilled workers. This growth isn’t solely from new job creation; it also reflects existing tech professionals upskilling to incorporate AI into their work, alongside new entrants to the workforce possessing these skills.San Francisco is considered a central hub for the AI revolution, hosting major firms like OpenAI.While Silicon Valley historically led the tech sector, AI’s influence is extending to a broader range of cities and industries. The demand for AI talent is particularly strong within the FIRE sector – financial services,insurance,and real estate – driving increased office and apartment rental demand,especially in Manhattan.Financial services companies are actively hiring AI talent to remain competitive with rapidly evolving fintech companies. Despite overall cutbacks in the broader tech industry, financial services have emerged as leading employers of AI professionals.
Unlike some othre tech fields that have embraced remote work, AI development remains largely office-based, mirroring the early days of tech innovation with long hours and frequent in-office presence. This trend is impacting office leasing activity, with tech companies accounting for 17% of total U.S. office leasing in the frist half of 2025, up from 10% in late 2022. In San Francisco, AI companies leased approximately 25% of all office space over the past two years.
The influx of AI talent is also driving up apartment rents in key markets. from 2021 to 2024,Manhattan saw rent increases exceeding 14%,Washington,D.C. experienced over 12% growth, Seattle saw increases above 7%, and San Francisco rents rose nearly 6%. High AI tech salaries allow workers to comfortably meet housing costs, with rent representing approximately 29% of income in Manhattan and as low as 19% in the San Francisco Bay Area and Washington, D.C., based on the standard affordability benchmark of 30% of income allocated to housing.
According to Colin Yasukochi, executive director of CBRE’s Tech Insights Centre, the ongoing AI revolution represents a potential new tech boom, attracting talent to cities at the forefront of this innovation and substantially impacting real estate markets.
