World Cup scouting report: San Francisco’s AI boom meets a global spotlight

CoStar News examined each FIFA World Cup host city and what the tournament June 11-July 19 could mean for local infrastructure, real estate, tourism and economic development long before the first soccer match is played. Find links to all the markets here.

FIFA World Cup action is coming to cities across North America, including San Francisco, which last hosted men’s World Cup soccer matches more than three decades ago and has long been a center of innovation and cultural influence.

Today it is a global center for technology and the artificial intelligence boom, with one of the most closely watched office, housing and hospitality markets in the U.S.

In addition to benefiting from the investment pouring into AI companies, the Bay Area hosted the National Football League's Super Bowl and the National Basketball Association's All-Star Game in the past year — ahead of the six World Cup matches. Collectively, those events were expected to bring in $1.4 billion in spending to San Francisco and surrounding cities, according to a report commissioned by the Bay Area Host Committee.

Here is CoStar News’ scouting report:

San Francisco was a magnet for entrepreneurs and risk-takers going back to its earliest days. It was incorporated in 1850 during the California Gold Rush, a period that rapidly transformed the city into a major U.S. port and commercial hub.

The city has a population of 800,000 — ranking as the nation's 17th biggest — and covers just under 47 square miles, though San Francisco punches above its weight in terms of profile and influence. It's one of country's wealthiest cities and ranks among the country’s most economically productive, despite its relatively small geographic footprint.

The city is also one of the most densely populated in the nation. Some of its diverse neighborhoods are dotted with picturesque Victorians, while sleek high-rises have sprouted in newer waterfront districts to accommodate tech workers and other professionals.

San Francisco’s skyline reflects decades of height limits, voter-approved development controls and seismic considerations.

The city’s tallest building is the 1,070-foot Salesforce Tower, a 61-story office skyscraper completed in 2018 that anchors the Financial District.

Beyond Salesforce Tower, building heights step down sharply in much of the city due to neighborhood zoning rules and opposition to skyscrapers, particularly in residential areas. As a result, San Francisco has relatively few ultra-tall buildings compared with cities of similar economic stature.

Last year, global developer Hines submitted plans to build the tallest skyscraper on the West Coast in downtown San Francisco, a 76-story tower with 1.6 million square feet of office space.

San Francisco is home to several Fortune 500 headquarters, including Salesforce, Wells Fargo, Uber Technologies and Visa. While many technology firms have footprints that stretch across the nine-county Bay Area, San Francisco remains a symbolic and strategic base for major corporations, particularly in tech, finance and professional services.

San Francisco is among the most expensive real estate markets in the U.S., though the city experienced one of the sharpest office corrections following the COVID-19 pandemic and is still feeling the aftereffects of the real estate reset.

Office vacancy remains elevated, particularly in the downtown core, following widespread adoption of remote and hybrid work models, according to CoStar data. Leasing demand has surged over the past year, driven by AI firms. As demand improves and new supply remains restrained, the vacancy rate has begun to inch downward.

Housing costs remain exceptionally high, and rents in San Francisco have grown faster than in any other city in the nation in recent months.

Retail conditions vary widely by neighborhood. While downtown corridors have struggled with reduced foot traffic, many neighborhood shopping streets maintain strong occupancy, according to CoStar data.

San Francisco has one of the largest hotel inventories in the U.S., heavily oriented toward international tourism, conventions and business travel. Hoteliers are counting on major global events such as the World Cup to help sustain demand growth. Hotel occupancy in San Francisco is up 6% for the World Cup’s duration. In San Francisco, two matches — Australia vs. Jordan and Australia vs. Paraguay — are showing around 10% year-over-year growth on match days.

World Cup matches will be played at Levi’s Stadium in nearby Santa Clara, but San Francisco is expected to serve as a major hospitality, tourism and fan hub for the tournament.

The city previously hosted men’s World Cup matches during the 1994 tournament at Stanford Stadium in Palo Alto, drawing global attention to the region during a pivotal moment in U.S. soccer history.

Under FIFA branding rules, Levi’s Stadium will temporarily be known as San Francisco Bay Area Stadium during the 2026 tournament.

San Francisco failed to snag one of the national team favorites for the early rounds of this year's World Cup but will host the likes of Switzerland, Australia, Austria, Algeria, Turkey and Qatar, itself the host of the 2022 World Cup, in the group stage.