Artificial intelligence companies are leasing office space across San Mateo County at a rate not seen from any single sector in years, and commercial brokers say the east-of-Highway 101 corridor that includes Burlingame's Bayshore Highway is positioned to benefit.

AI-related firms accounted for nearly 30% of all office leasing activity in San Mateo County during the second quarter of 2026, up from 19% in the first quarter and just 13% a year earlier, according to data from commercial real estate firm Newmark. The San Mateo Daily Journal reported the figures on Monday, July 27.

No specific AI company lease in Burlingame has been publicly confirmed. But the trend is pushing demand toward exactly the kind of inventory the city has: large office and former lab buildings east of 101.

Eric Bluestein, executive managing director at Newmark, said in a December 2025 Daily Journal report that "a lot of those shell buildings that you see along 101 are going to go to AI and tech companies." Simon Clark, executive vice president at CBRE, said at the same time that demand east of Highway 101 was returning for the first time since the pandemic, a corridor that includes Burlingame's Bayshore Highway and Airport Boulevard.

The scale of AI demand is notable. Building tours by prospective AI tenants nationwide jumped 85% in the year through May 2026, according to commercial property data provider VTS. Those companies sought spaces averaging 37,000 square feet, 37% larger than what traditional tech firms look for, VTS reported in a July 20 analysis.

Peninsula-wide office vacancy stood at roughly 23% as of late 2025, according to CBRE, while life science vacancy hovered near 30%. AI companies are converting some of those empty lab buildings into traditional office space, the Daily Journal reported. Life science projects still represent about 31% of all major development tracked by the San Mateo County Assessor's Office, a large pool of inventory that AI firms are beginning to absorb.

Burlingame already has significant commercial activity in the pipeline. Peninsula Innovation Point at 555-577 Airport Blvd. was completed in 2025 as one of the county's major commercial projects, according to the Assessor's Office.

With AI's share of county leasing nearly tripling over 12 months, the second half of 2026 will test whether Burlingame's vacant office and lab buildings along Bayshore Highway land the tenants brokers have been predicting.