AI may dominate the headlines, but the real story for business leaders is how it’s reshaping commercial real estate. Whether you see AI as a revolution or a bubble, one fact is undeniable: the facilities that support AI are becoming some of the most competitive and strategic assets in the market today.
AI runs on massive amounts of data, and that data has to live somewhere. What Nvidia calls “AI factories” are, in our world, data centers. Unlike traditional office or warehouse space, these facilities require:
Locations that once seemed secondary are now at the center of national competition. Land near substations and water access is appreciating rapidly, and municipalities are becoming gatekeepers to supply.
But here’s the challenge: while AI evolves in 12–18 month cycles, it often takes years to entitle, permit, and build these facilities. That time mismatch can create risk—overbuilding, stranded assets, or bottlenecks in delivery. For business leaders within the A.I. sector, timing has never mattered more.
Demand for AI-enabled facilities is outpacing supply, and municipalities are responding with caution. Data centers consume enormous energy and water, but don’t bring large-scale jobs. Because of that, cities are increasingly restricting where and how many can be built.
This can create an imbalance: corporations are racing to secure space, but regulatory limits make it harder to find. The companies that plan ahead—aligning with municipalities and securing entitlements early—will win in the long run.
Today, “RTO” or return-to-work policies are becoming more widely adopted across the country, as 70% of companies now have some RTO policy in place. Additionally, 79% of U.S. CEOs now expect their employees to be working full-time in the office within three years. That shift is already showing up in markets tied to AI.
In San Francisco, Nvidia is close to a 45,000-square-foot lease at Mission Rock, while AI firms have leased over 1.7 million square feet citywide. Projections suggest AI alone could drive 12 million square feet of office leasing by 2030 in that market.
This isn’t just about tech companies. Across industries, leaders are recognizing that offices serve as the strategic hub for culture, innovation, and collaboration. As demand strengthens, expect a renewed “flight to quality”—where businesses seek premium, well-located, amenity-rich environments to anchor their teams.
The AI boom isn’t just digital—it’s physical. In Houston, Nvidia and Apple are backing new manufacturing facilities tied to AI hardware. This signals a new chapter in industrial real estate:
AI may be software-driven, but it is creating hard infrastructure demand that is reshaping how and where industrial space is developed.
AI is not only changing how we work—it’s changing where business happens. Data centers, premium office space, and industrial facilities are now at the forefront of strategic growth.
For business leaders, the key is foresight:
This content was prepared by the Keyser editorial team. It is provided for educational purposes only and should not be construed as legal or financial advice.