Building AI Innovation Through Smart Real Estate Strategy

A few weeks ago, I sat down with the CRE leaders at a global tech firm. We weren't discussing their return-to-office plan or the design of their next campus. We were mapping out how to conduct a comprehensive internal process evaluation, systematically identifying opportunities to integrate AI and automation across their operations to improve efficiency and reduce operational risk. This conversation isn't an outlier; it's the new reality. The tech sector is in an AI arms race, and the battlefield is being funded, in part, by a radical rethinking of corporate real estate.

The old model of flashy amenities and sprawling campuses as a recruitment tool is over. Today, the C-suite is asking a tougher, more strategic question: How can we optimize our portfolio to accelerate innovation and secure our place in the AI-driven future? It’s a pivot from real estate as a cost center to real estate as a strategic engine for growth.

The numbers tell the story of this shift. Leasing for technology companies has dropped about 31% from pre-pandemic levels as firms are retooling their spending priorities providing evidence to a strategic realignment. Capital flows are moving decisively away from traditional office space and toward the infrastructure that powers AI.

The most strategic approach I've seen involves budget realignment for talent acquisition. Companies are examining their entire CRE capital and operating expenses—particularly through portfolio optimization and flexible workplace strategies—to enable significant spending on internal technology, tools, and the specialized AI talent needed to compete. This strategy frees up resources for essential AI investments, a top priority for tech leaders who are focused on increasing revenue (66%) and innovating new products (62%), according to JLL’s Future of Work survey. These companies are now building million-square-foot data centers, a highly capital-intensive business that redefines real estate's role in the tech ecosystem.

This capital shift is happening alongside the ongoing challenge of hybrid work. Most tech companies now expect employees back in the office three days a week, but enforcement of these policies remains inconsistent. Our 2025 JLL Pulse Survey, found that 24% of tech companies don't enforce their policies at all, while 45% leave it to individual managers to enforce attendance for their teams.

Optimizing space utilization is a top goal across tech firms. To address this challenge, companies are embracing goal-driven data strategies. JLL Research reveals that 76% of tech occupancy planners use utilization data to support design decisions, helping to create environments tailored to how employees actually work. Last year, 56% of organizations reduced their footprint to increase utilization, while 73% added more collaborative spaces to support their hybrid programs.

One of our clients leveraged AI to analyze their utilization data and determine how facilities services delivery aligned with employee demand. This approach enabled them to deliver a higher-quality employee experience while simultaneously lowering operating costs—a true win-win scenario.

Nowhere is the need for a new strategy more apparent than in lab and R&D spaces. These environments are the engine rooms of AI innovation, yet they are often the most overlooked and under-measured assets in a portfolio. Our research found that while 91% of tech companies see utilization as a top metric, 47% of companies with lab space do not track the utilization of these specialized environments.

Leading companies are correcting this oversight by moving away from siloed, individually secured labs to large, open, and centralized environments. Imagine a 50,000-square-foot lab with no permanent walls, where teams can adapt the space as projects evolve. Making this switch not only increases flexibility but also fosters spontaneous collaboration between teams that were previously been firewalled from each other. By tracking lab utilization with the same rigor as office space, companies can finally make data-driven decisions about their most critical innovation assets.

The changes we see today are just the beginning. Companies will continue to increase spending on AI compute within data centers, lab spaces for hardware innovation, and office environments where top AI talent can collaborate. The most forward-thinking leaders are already planning for a future where the workplace is an active participant in the work itself—an environment that learns employee behaviors, anticipates needs and fosters seamless human-AI collaboration. This requires a "test-and-learn" mindset and a commitment to continuous optimization.

The race for AI dominance will be won by the companies that innovate fastest. Mastering this new real estate playbook—balancing optimization with innovation and leveraging data to make every square foot count—is no longer optional. It is the key to turning your real estate portfolio into a powerful competitive advantage.

The capital shift is already underway. Is your real estate strategy an anchor holding you back or the engine fueling your innovation? Ready to turn your tech space ambition into action? Reach out to set up a meeting.