AI driving deep divergence across real estate markets as highest-exposure cities show strongest resilience

New research from JLL, conducted in partnership with MIT's Sloan School of Management and Center for Real Estate, indicates that Artificial Intelligence (AI) is creating a divergence in real estate markets. Contrary to the assumption that AI would uniformly reduce commercial real estate footprints, the study finds that markets with sectors most exposed to AI-driven job displacement are also experiencing the strongest real estate demand from AI companies. This suggests that a market's capacity to adapt is more critical than its exposure risk alone. The research highlights that while overall U.S. tech employment declined slightly in early 2026, office leasing demand in the AI sector continues to rebound. This decoupling is attributed to AI's multifaceted impact on labor markets: augmenting existing roles, selectively displacing certain jobs, and creating new ones. While a small percentage of job cuts in 2025 were AI-driven, over one million AI-related jobs were created between 2023 and 2025. The study identifies four diverging trajectories for real estate markets: High Negative Disruption, Low Disruption Augmentation, High Offsetting Disruption, and AI Boom Upside. These trajectories are determined by a market's industry composition and employment structure. At the industry level, logistics and healthcare are augmenting workforces with AI, while professional services and data centers are restructuring around AI for leaner teams. Despite some restructuring, 60% of companies globally plan to expand their workforces in the next 3-5 years. The research also notes that AI's impact on jobs does not automatically translate to real estate impacts, as supply conditions and the broader economy can influence the outcome.