Artificial intelligence is set to reshape commercial property markets over the next decade — but not in a single direction. A new white paper from Cushman & Wakefield warns that the gap between thriving and struggling assets is about to widen sharply.
Four Futures, One Certainty
The question, according to the report: AI Impact on Commercial Real Estate: The Next 10 Years, isn’t whether AI will affect property demand — it clearly will. What matters is which locations, building standards and property types end up on the winning side.
Baseline: A Dip, Then a Rebound
The most likely outcome, given a 50 per cent probability, sees firms initially pause hiring as they focus on productivity gains and workflow changes. Office demand would follow suit, cooling briefly before recovering as new business models and start-ups emerge.
Offices will feel this first. Yet the authors don’t foresee a blanket downturn — rather, an acceleration of the “flight to quality” already underway. ESG-compliant, flexible space in strong talent markets should hold firm, while ageing stock faces mounting pressure.
The Optimistic Case: Growth Across the Board
In a rosier 15 per cent scenario, AI turbocharges economic growth, fuelling new jobs and business expansion. Nearly every asset class benefits — retail from consumer spending, logistics from freight growth, and housing from rising incomes.
This isn’t pure speculation, as reported by immobilienmanager.de: PwC’s Global AI Jobs Barometer 2026 shows companies with heavy AI adoption growing markedly faster, with productivity around 40 per cent higher alongside stronger wage and employment growth.
Offices: Still the Biggest Wildcard
In a negative scenario similar to the dot-com crisis, overinvestment in AI could initially lead to economic setbacks. Unlike logistics, retail or housing — which respond indirectly to broader economic shifts — office demand is tied directly to knowledge-work employment, making it the most volatile segment.
A dot-com-style correction could see firms delay expansion and vacancies climb. In the bleakest scenario (just 5 per cent likelihood), AI permanently displaces human labour, entrenching high vacancy rates and deepening the divide between prime and obsolete stock.
Location Becomes the New Currency
Across every scenario, one theme holds: AI won’t shrink the market uniformly — it will sort it. JLL echoes this view, expecting innovation hubs and major metros to pull ahead while weaker, lower-quality markets fall further behind.
For owners of older office stock, the message is blunt: invest in quality, sustainability and flexibility, or risk being left behind in an increasingly polarised market.