According to new research from JLL, across the US, the markets defined by sectors most exposed to AI-driven job displacement are also seeing the strongest real estate demand from AI companies.
The finding challenges the assumption that AI will compress commercial real estate footprint. The research was conducted in partnership with MIT’s Sloan School of Management and Centre for Real Estate. They found that AI is creating deep divergence across markets, industries and asset classes, separating those with the capacity to adapt from those without.
The ‘Where AI is Changing Jobs and What it Means For Real Estate’ research finds that overall US tech employment declined by 1.5% in early 2026. Office leasing demand in the sector continues to rebound, demonstrating a clear decoupling of AI growth from broader trends in tech and other office-using industries.
This is partially due to how AI operates through three simultaneous forces on labour markets – augmenting existing roles without reducing headcount, selectively displacing specific job types, and creating entirely new categories of work.
While 5% of job cuts in 2025 identify AI as a primary driver, over one million AI-related jobs were created between 2023 and 2025. The balance of these forces varies significantly by geography and industry, creating diverging real estate trends.
In San Francisco, for example, nearly 30% of total leasing has come from AI companies since 2025, while the city carries among the highest exposure to AI-driven job dislocation risks in the US. This trend demonstrates that a market’s capacity to adapt, capitalise on new opportunities, and redeploy the workforce is more critical to real estate performance than exposure risk alone.
“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.
“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 capitalise on the opportunities AI creates.”
Alexandra Bryant, Global CEO, Value & Risk Advisory, JLL
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 augmentationin 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.
Even as some sectors restructure toward smaller teams, globally, 60% of companies still plan to expand their workforces in the next three to five years, according to JLL’s 2026 Future of Work Survey.
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 labour exposure can still perform very differently. Office construction activity in the US 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. The winners will be the investors who act on these signals now, ahead of the data.”
Alexandra Bryant, Global CEO, Value & Risk Advisory, JLL
For investors, success now means acting on early labour market signals before transaction data can confirm the trend. For occupiers, it demands moving beyond static headcount to plan space around how work is performed – a more dynamic approach for a more dynamic era.
