Even as national headlines dwell on office distress and looming refinancings, the picture on the ground in Silicon Valley is more nuanced. SteelWave CEO Barry DiRaimondo, a Bay Area operator with more than three decades of experience, is seeing renewed tenant interest in select submarkets—particularly from AI, robotics and innovation-led users—alongside a widening performance gap between upgraded, well-located assets and commodity space.  

DiRaimondo unpacks how demand is evolving across SteelWave’s portfolio, how tenants are recalibrating their priorities, and why the recovery looks more like disciplined, selective capital deployment than a broad-based rebound. 

CM: What measurable changes are you seeing in tenant activity across Silicon Valley compared to 12–18 months ago?  

BD: First, it is important to note that the greater Silicon Valley now includes San Francisco. Tenant activity across this broader region is currently approximately three times higher than it was 18 months ago, surpassing pre-COVID levels. There are over 20 million square feet of tenants actively seeking space. In San Francisco alone, there are 25 requirements exceeding 100,000 square feet each, which is more than at any point in history. 

CM: What specific signs of “renewed leasing conversations” are you seeing from tech and AI-aligned companies, and how do those compare with activity 12–18 months ago?  

BD: Tech and AI-aligned tenant activity now represents approximately 55% to 60% of total activity. This is roughly double the share from 18 months ago. 

CM: Are AI-driven users signing materially different lease terms—length, flexibility, capital commitments—than what you saw pre-pandemic?  

BD: AI-driven users are almost exclusively signing leases for pre-improved space, as the time required to design, permit, and build interior space does not align with near-term growth needs. Smaller startups are seeking smaller spaces with shorter lease terms to accommodate rapid growth, while well-capitalized mid-sized and large tenants are signing more traditional leases ranging from five to twelve years. 

CM: You’ve highlighted a widening gap between “well-located, upgraded assets” and commodity product. What specific features are separating the haves from the have-nots?  

BD: Key differentiators include fresh tenant improvements, views, access to public transportation, curated food and beverage offerings, proximity to entertainment venues, fitness facilities, conference facilities, active and collaborative outdoor spaces, and high-energy experiential environments. 

CM: Are you seeing more demand for flexibility (expansion rights, contraction options, termination clauses), or are tenants now willing to commit longer when they find the right space? 

BD: Smaller tenants continue to prioritize flexibility in lease terms, while larger tenants are maintaining more traditional lease structures in order to access the full range of amenities and features needed to attract and retain talent. 

CM: You’ve described the current environment as “more disciplined, selective capital deployment rather than a broad-based rebound.” What does disciplined deployment look like for SteelWave in 2026?  

BD: Capital is primarily focused on assets that require a lighter physical lift, given the time needed to design, permit, and deliver amenity packages. There is a preference for acquiring properties where much of the amenity infrastructure is already in place, although these opportunities are expected to become scarcer over time. 

At the same time, capital is being directed toward locations with active leasing momentum. On the tenant side, users are taking a more deliberate approach to space decisions, which is extending lease negotiation timelines. Landlords must account for this dynamic in their underwriting.