AI creating uneven real estate demand
New research finds AI is strengthening demand in some commercial markets while reducing space needs in others, depending on local jobs and industries.
Artificial intelligence is not pushing every commercial real estate market in the same direction, creating new opportunities in some cities and industries while weakening demand in others, according to new research from JLL.
The report found that AI is affecting employment through three forces: helping workers perform existing jobs, replacing selected positions and creating new types of work. The balance varies by industry and location, meaning AI could reduce the office space needs in one market while supporting leasing growth in another.
For commercial Realtors®, the findings suggest that broad predictions about AI eliminating jobs or emptying offices may be less useful than studying a market’s employers, workforce and available properties.
“A market’s industry composition and employment structure” are central to determining whether AI produces job displacement, job creation or a combination of both, JLL said.
The technology sector illustrates the divide. U.S. tech employment declined 1.5% from 2025 to 2026, but office leasing by technology companies continued to recover as AI firms expanded and businesses increased workplace use. A limited supply of high-quality office space also supported demand.
The report found that property quality is becoming increasingly important. Newer and premium buildings may continue attracting companies seeking collaborative, technology-equipped workplaces, while older properties could face greater pressure.
AI’s influence also differs by industry. JLL said logistics, health care and hospitality are more likely to use AI to help employees while maintaining their underlying workforce needs. Financial services, professional services and data centers may use automation to operate with leaner teams or alter the type of space they need.
Still, the research does not point to widespread employment contraction. JLL’s 2026 Future of Work survey found that 60% of companies plan to expand their workforces during the next three to five years, although the pace and type of growth will vary.
JLL said investors and businesses should evaluate individual markets, industries and properties because AI is separating stronger, adaptable locations and buildings from those less prepared for changing workforce and space needs.
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