The commercial real estate sector has been reshaped in recent years by e-commerce and remote working. Now artificial intelligence is a new force reshaping the industry.
At first glance, commercial real estate — the physical bricks and mortar — seems immune to tech disruption. But real estate services firms increasingly face a challenge: convincing clients they need as many humans as before to broker deals, advise investors and manage portfolios. In mid-February, shares of major service firms such as CBRE, Jones Lang LaSalle and Cushman & Wakefield plunged as investors worried AI could upend knowledge-intensive parts of the business. Valuations have largely stagnated since.
Joe Dickstein, an equity research analyst at Jefferies, says the concern isn’t that AI will make office buildings worthless but that brokers and advisory teams could be displaced. “The fear is that these labor-intensive, intermediary businesses are ripe for disruption,” he told DW. While there could be secondary effects on office demand, the main worry is the durability of advisory businesses.
Smarter investing?
Francis Huang first considered AI-driven investment decisions while at Harvard in 2019, researching autonomous private equity systems. Together with Simon Mendelsohn he co‑founded Apers AI, which uses specialized models to evaluate institutional and commercial real estate opportunities. Large investors often need to screen many potential deals to find a relatively small number of good ones — a process that historically demanded extensive broker labor. Huang says AI now automates much of that filtering. “What we see today is that AI is automating more than 90% of these decisions,” he says. “It’s essentially their investment committee.”
Other impacts
Industry insiders caution that AI won’t simply wipe out existing service providers. Yuehan Wang, global research director for real estate technologies at Jones Lang LaSalle, says the industry largely treats AI as an opportunity and that the real threat is failing to adopt it. Investors view AI not as a defensive necessity but as a competitive weapon for refining investment decisions. Top applications include market trend analysis, risk modeling, portfolio optimization and automated valuation.
AI’s effects extend beyond advisory models. Demand for computing power to train and run AI has triggered a global data center building boom, creating a new class of commercial real estate demand. At the same time, AI and tech companies themselves continue to lease office space: tech firms accounted for about 20% of US office leasing in the first half of 2025, roughly double their share in 2022, helping reverse vacancy trends in cities like New York and San Francisco.
Human connection
Huang frames AI not as a replacement but as an upgrade that allocates capital more efficiently. He argues real estate value derives from the highest and best use of land, which evolves as needs change — citing Kendall Square in Cambridge, Massachusetts, as an example of land repurposed from industry to research and biotech over time.
Wang says we are at the start of AI-driven transformation; after workflow redesign and business model changes, more profound shifts may become clear by 2030 and beyond. Still, many expect human relationships to remain central. Dickstein says the panic is overdone: commercial real estate services possess proprietary data not easily accessible to new AI entrants, and the business is deeply interpersonal. He does not expect those fundamentals to change materially in the AI era.
Edited by: Kristie Pladson