4. AI — from adoption experiment to operating model and real estate demand discussion
This is where the picture has moved fastest. The “pilot fatigue” we expected, while true, has given way to something more consequential. Agentic AI has started decoupling the longstanding link between output growth and headcount growth for knowledge work, raising fundamental questions about the long-term trajectory of space demand, particularly for offices.
The answer is nuanced. The theme is divergence, not reduction. The net labor impact from AI for any given market is a function of how three forces combine: role augmentation, selective displacement and job creation. The proportion of the three is largely defined by a market’s industry composition and employment structure.
On the AI adoption front, 42% of companies polled in our Future of Work Survey 2026 have moved past the initial pilot stage, but only 15% have progressed on AI-driven organizational change. Most companies still struggle to track real ROI from their AI investments, making cost of adoption an increasing concern.
The industry is facing a phase of both risk and opportunity as the AI transformation plays out – three of the top four challenges to commercial real estate portfolios are technology-related: cyber security and data privacy (47% of respondents); AI disruption (41%); and uncertainty of AI impact on space requirements (40%).
But as our research Where AI is changing jobs and what it means for real estate points out, AI is not operating in a vacuum; the confluence of multiple factors, in particular supply conditions, asset quality, the macro context and AI, all impact workforce and property performance.
