Bay Area Industrial Real Estate: AI Manufacturing Hub, Advanced Technology and 880 Corridor Growth

Graeme Coyle serves as senior vice president and San Francisco Bay Area market officer for Link Logistics, where he oversees industrial real estate operations across one of the nation's most dynamic and tech-driven markets. With the Bay Area positioned as the global epicenter of artificial intelligence development and an advanced manufacturing hub, Graeme helps businesses navigate a market characterized by AI-related demand, diverse product types and unprecedented venture capital investment. Link Logistics' Bay Area portfolio serves companies from robotics manufacturers and EV producers to traditional distribution operations. In this Q&A, Graeme discusses warehouse space in the Bay Area—what drives demand, how AI manufacturing is reshaping submarkets and why power capacity has become a critical constraint for industrial users.

What drives demand for industrial real estate in the San Francisco Bay Area?

Graeme: The Bay Area has an incredibly diverse industrial real estate landscape in terms of both user types and product types. The market includes Class-A modern distribution warehouses, R&D buildings, cold storage facilities and data centers—a range of industrial real estate product types you don't see in many other markets across the country.

What's driving demand right now is the Bay Area's position as the epicenter of the world's tech industry, supported by institutions like UC Berkeley and Stanford that feed the highly skilled workforce. More specifically, AI-related demand has exploded recently. The Bay Area captured approximately 60% of global AI-related venture capital in 2025.

Much of the intellectual development happens in San Francisco, but the manufacturing side—the physical production of AI infrastructure—is more concentrated in the South Bay along the South 880 Corridor and greater Silicon Valley. That's where companies manufacture the hardware components of AI: servers, cabinets, racks and related equipment. Companies like Quanta, SuperMicro and MiTAC are absorbing significant industrial space in Fremont, Milpitas, Santa Clara and Sunnyvale.

How do industrial submarkets differ across the Bay Area?

Graeme: The South 880 Corridor and Silicon Valley represent the hottest submarkets right now. This is where AI-related advanced manufacturing activity is concentrated—Fremont through Milpitas, Santa Clara and Sunnyvale. The demand for industrial space from advanced manufacturers in this corridor is driving the market.

The North 880 Corridor serves different users. This area—including Oakland, San Leandro and Hayward—is oriented toward the Port of Oakland and traditional industrial operations. You see more third-party logistics providers, food and beverage distribution, last-mile distribution and port-related users in the North 880 Corridor.

Peripheral markets—such as Livermore, Benicia and Concord—serve smaller service-related businesses like HVAC contractors, construction companies and local manufacturers that need warehouse space close to more affordable residential areas where their workforce lives.

What role is AI manufacturing playing in the Bay Area industrial market?

Graeme: AI manufacturing has become transformative for the Bay Area industrial market. The venture capital flowing into AI companies translates directly into demand for manufacturing space to produce AI hardware infrastructure.

Companies manufacturing AI servers, racks and related equipment need specialized facilities, typically modern warehouses with 40-foot clear heights that can accommodate advanced manufacturing operations. These aren't the million-square-foot facilities you see in other markets—new construction in the Bay Area typically ranges from 100,000 to 250,000 square feet because this is an infill market where older facilities such as bus manufacturing plants or dairies get redeveloped into modern industrial buildings.

This advanced manufacturing trend is driving demand throughout the South 880 Corridor, with companies seeking facilities that can support technology production, assembly and distribution operations.

How is Link Logistics participating in AI and advanced manufacturing demand?

Graeme: Link Logistics is directly engaged with the companies driving this transformation. We recently completed a deal with a major electric vehicle company in Newark, and we're currently working with a drone company on a 24,000-square-foot space in Hayward.

We’re also in discussions about a larger space for an AI-related robotics company relocating from San Francisco. This demonstrates how AI and robotics companies are moving from San Francisco to the East Bay to access manufacturing and operational space.

These deals represent the range of AI-related users in our portfolio: EV manufacturers, drone companies and robotics firms all need industrial space along the 880 Corridor. Our average space size of 25,000 to 30,000 square feet in the Bay Area positions us well to serve these advanced manufacturers as they scale production.

What other technology sectors are driving industrial demand?

Graeme: Electric vehicle and battery manufacturing represent significant demand alongside AI. Tesla alone accounts for substantial demand for space—for example, it finalized a deal in January 2026 for 267,000 square feet in a newly developed industrial facility. EV-related manufacturing continues to expand throughout the South Bay corridor.

Advanced manufacturing more broadly—encompassing robotics, aerospace components, life sciences and precision manufacturing—drives demand for industrial properties with specific requirements: higher power capacity, modern loading infrastructure and proximity to the skilled technical workforce concentrated in the Bay Area.

Why has power capacity become such a critical issue?

Graeme: Power capacity has become a major constraint for both data centers and advanced manufacturers in the Bay Area. Companies operating data centers or AI manufacturing facilities need substantial power—often 50 to 100+ megawatts—and local utilities are struggling to deliver the necessary capacity. Any company evaluating data center development or advanced manufacturing operations in the Bay Area must factor power availability into their site selection—it's no longer a given that sufficient capacity can be secured.

This constraint affects industrial real estate decisions directly. Buildings with existing power capacity or proximity to substations command premiums, and users increasingly need to confirm power availability before committing to facilities.

How does Link Logistics support companies looking for warehouse space in the Bay Area?

Graeme: Link Logistics’ Bay Area presence is concentrated along the 880 Corridor where demand for warehouse space for lease is strongest. We also have a secondary presence in more peripheral markets like Livermore, Benicia and Concord.

Our warehouse portfolio includes diverse product types: cold storage, Class-A warehouses, R&D buildings and facilities ranging from smaller spaces to more than 80,000 square feet. Our average tenant size is 25,000 to 30,000 square feet, which positions us well for the AI-related manufacturers, robotics companies and advanced manufacturers that are driving current demand.

Strategically consolidating our focus on the East Bay, where the manufacturing and distribution activity is concentrated, allows us to serve the companies—whether Tesla, drone manufacturers or AI robotics firms—that need industrial space along the 880 Corridor. We're positioned to serve the advanced manufacturers and technology companies reshaping the Bay Area industrial real estate landscape.

Looking ahead, what makes the Bay Area attractive for businesses evaluating warehouse space?

Graeme: The Bay Area offers access to the most concentrated venture capital ecosystem in the United States. That capital translates into manufacturing demand as companies scale production of AI hardware, robotics, EV components and other advanced technologies. The workforce quality is unmatched—UC Berkeley, Stanford and other institutions produce the engineers, technicians and skilled workers that advanced manufacturers require. 

For companies seeking warehouse space for lease to support AI manufacturing, robotics, electric vehicles or advanced manufacturing sectors, the Bay Area provides proximity to capital, customers, talent and the broader technology ecosystem. New industrial development continues despite being an infill market—older facilities are being redeveloped into modern 40-foot-clear-height warehouses to serve these advanced manufacturers.

The power capacity challenges are real and must be addressed in site selection, but for companies that can secure appropriate facilities, the Bay Area remains the center of global technology innovation and the manufacturing operations that support it.

Explore available warehouse and distribution space in the San Francisco Bay Area to learn more about industrial real estate opportunities in Northern California.