Artificial Intelligence: Real Estate Revolution or Evolution?

89%

C-suite leaders believe AI can help solve major CRE challenges

Future of Work Survey, JLL Research, 2025

700+

companies providing AI-powered Real Estate Tech solutions by end of 2024

JLL Research

2.04M sqm

Real estate footprint of AI companies in the US as of May 2025

JLL Research

As the capabilities of AI agents continue to astonish the world in 2025, AI is becoming increasingly powerful.
 

• AI has enormous potential to reshape real estate, with near and long-term impacts ranging from the emergence of new markets and asset types to innovations in investment and revenue models.
• A rapidly expanding AI ecosystem and its supporting infrastructure will drive demand for real estate in different markets across the globe.
• There are increasing number of AI-powered real estate technology solutions. Organizations will need to consider how they can harness AI strategically and ethically, piloting applications before scaling to deliver value.

AI’s impact in the real estate market
 

AI has been deemed a revolution with widespread impact

According to OpenAI, around 80% of jobs are exposed to AI disruption. This number has sparked a wave of concerns about a potential upheaval in the real estate market because of the impending changes in the labor market.

Anxiety around such change is not new. In 1589, Queen Elizabeth of England refused to grant the inventor of the mechanical knitting machine a patent out of fear that it would put knitters out of work. Now, it is universally acknowledged that mechanical knitting machines spearheaded the first industrial revolution that led to explosive economic growth and real estate market expansion.

AI is expected to boost productivity

When technology allows fewer people to achieve the same productivity level, more people are freed to create new areas of opportunity. Goldman Sachs draws on a study by MIT economist David Autor to reveal that more than 85% of employment growth in the U.S. over the last 80 years is explained by the technology-driven creation of new positions.

Additionally, according to Microsoft CEO Satya Nadella, AI service providers are making the conscious choice to explore a human-centric approach, developing “co-pilot” products designed to assist people, as opposed to “auto-pilot” products that aim to entirely replace human roles. This positions AI as a significant productivity booster. On an aggregated level, the increase in productivity is projected to augment global GDP by 14% by the year 2030.

Commercial real estate is set to feel these effects. Historically, there have been five adaptive ways that real estate responded to technological changes over time:

With AI, we anticipate a similar five-fold impact in the long run. While it remains to be seen how AI will be applied to specific sectors like healthcare and how much this growth will generate space demand, some influences are already emerging.

1. Geolocation: AI companies and investments have been observed to cluster around established tech markets. Going forward, growth is likely to be concentrated in locations where AI talent is available, namely tech hubs, innovation centers and universities.

2. Altered demand among assets: AI development calls for more and better data centers, energy grids and connectivity infrastructure.

3. New asset and product types: the birth of the ‘real intelligent building’ is imminent. AI-compliant infrastructure will become a default just as internet connections are a default feature of current buildings. AI will also help deliver net-zero buildings with high sustainability performance.

4. Revenue and investment: AI-powered underwriting and processes will enable faster transactions and more efficient understanding of properties and markets, catalyzing investments at a global scale. AI-compliant infrastructure and the ability to plug in multiple systems could also enable the expansion of ‘space as a service’ models and new revenue streams for landlords and developers.

5. Design and space function: AI will allow for experience-driven design and highly customizable environmental settings.

Read more about this topic in JLL’s Future Vision series - Get set for the 5th Industrial Revolution Real estate strategies for an AI-powered world

Existing AI companies prefer specific locations. In the U.S., for example, 42% of AI companies are concentrated in the San Francisco Bay Area, followed by Boston, Seattle and New York. AI startup growth is expected to continue to center around these major tech hubs in the near future.
 

U.S. sector distribution of AI company occupied