JLL research finds real estate demand is being reshaped by AI's impact on a market and its ability to adapt

, /PRNewswire/ -- Across the United States, markets characterized by sectors with the greatest exposure to AI-induced job changes are experiencing the most robust real estate demand from AI firms, based on fresh analysis from JLL (NYSE: JLL). This outcome counters the notion that AI will evenly reduce commercial real estate needs. The study, done with MIT's Sloan School of Management and Center for Real Estate, reveals that AI is generating significant splits across markets, sectors, and property types, distinguishing those able to adjust from those unable.

This split is already evident. The Where AI is Changing Jobs and What it Means For Real Estate research shows that even as overall U.S. tech employment fell by 1.5% in early 2026, office leasing demand in the sector keeps recovering, highlighting a clear separation of AI expansion from wider patterns in tech and other office-using fields.

This stems partly from how AI acts through three concurrent effects on labor markets: enhancing current positions without cutting staff, selectively replacing certain job categories, and generating brand new types of work. While five percent of job reductions in 2025 cite AI as a main cause, over one million AI-related positions emerged between 2023 and 2025. The mix of these effects differs markedly by location and industry, producing diverging real estate patterns.

In San Francisco, for instance, nearly 30% of total leasing has come from AI companies since 2025, even as the city holds among the highest exposure to AI-driven job dislocation risks in the U.S. This pattern shows that a market's capacity to adjust, seize new chances, and redeploy the workforce matters more to real estate performance than exposure risk by itself.

"We are seeing this split play out in real time. The winning real estate strategies will be those that look beyond the headlines about job losses and focus on a market and industry's ability to adapt," said Alexandra Bryant, Global CEO, Value and Risk Advisory. "It's no longer about whether a market has AI exposure. It's about whether it has the right mix of talent, infrastructure, and quality real estate to capitalize on the opportunities AI creates."

These combined forces are already reshaping demand across markets, defining four clear trajectories:

High Negative Disruption in markets where automation in back-office and administrative roles shrinks teams, reducing the need for traditional office space.
Low Disruption Augmentation in markets where AI assists skilled knowledge workers, driving companies to upgrade to higher-quality, collaborative offices.
High Offsetting Disruption as industries restructure and companies relocate roles, creating a geographic redistribution of space demand without decreasing total demand size.
AI Boom Upside in innovation hubs and AI-native sectors, which creates competition for premium buildings.

A market's industry composition and employment structure are the primary factors determining the trajectory it tracks.

At the industry level, this divergence runs equally deep. Logistics and healthcare are using AI to augment their workforces while keeping core growth drivers intact. Professional services and data centers, by contrast, are restructuring delivery models around AI to produce more with leaner teams. Even as some sectors restructure toward smaller teams, headcount is not contracting in total, as globally, 60% of companies still plan to expand their workforces in the next 3-5 years, according to JLL's 2026 Future of Work Survey.

Another key point to note is that AI's impact on jobs does not automatically flow through to real estate. Supply conditions and the broader economy can offset, delay, or amplify that impact, which is in part why markets and properties with similar labor exposure can still perform very differently. Office construction activity in U.S. and Europe is hitting a historic low, pushing trophy asset rents to all-time highs.

"Outperformance in this cycle won't only come from yield compression. It will come from driving value at an asset level through better understanding how these thematics will translate into asset and submarket impact," Bryant said. "The winners will be the investors who act on these signals now, ahead of the data."

Ultimately, navigating the AI-driven shift requires a new playbook. For investors, success now means acting on early labor market signals before transaction data can confirm the trend. For occupiers, it demands moving beyond static headcount to plan space around how work is actually performed - a more dynamic approach for a more dynamic era.

For more information, download the full Where AI is Changing Jobs and What it Means For Real Estate research.

About JLL
JLL (NYSE:JLL) is a leading global commercial real estate services and investment management company with annual revenue of $26.1 billion, operations in over 80 countries and a global workforce of more than 113,000 as of March 31, 2026. For over 200 years, clients have trusted JLL, a Fortune 500^® company, to help them confidently buy, build, occupy, manage and invest across a variety of industries and property types, including office, industrial, hotel, multi-family, retail and data center properties. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY. Powered by rich global datasets and leading technology capabilities, we provide coordinated, end-to-end delivery of real estate services for a broad range of global clients who represent a wide variety of industries. Through LaSalle Investment Management, we invest for clients on a global basis in both private assets and publicly traded real estate securities. For further information, visit jll.com.

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SOURCE JLL