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

JLL research finds real estate demand is being reshaped by AI's impact on a market and its ability to adapt

CHICAGO, July 21, 2026 /PRNewswire/ -- Across the U.S., the markets defined by sectors most exposed to AI-driven job displacement are also seeing the strongest real estate demand from AI companies, according to new research from JLL (NYSE:JLL). The finding challenges the assumption that AI will uniformly compress commercial real estate footprint. The research, conducted in partnership with MIT's Sloan School of Management and Center for Real Estate, instead shows that AI is creating deep divergence across markets, industries, and asset classes, separating those with the capacity to adapt from those without.

This divergence is already stark. The Where AI is Changing Jobs and What it Means For Real Estate research finds that even as overall U.S. 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 in part due to how AI operates through three simultaneous forces on labor markets: augmenting existing roles without reducing headcount, selectively displacing specific job types, and creating entirely new categories of work. While five percent 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 U.S. This trend demonstrates that a market's capacity to adapt, capitalize 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," said Alexandra Bryant, Global CEO, Value & Risk Advisory. "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 capitalize on the opportunities AI creates."

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 Augmentation in 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.

A market's industry composition and employment structure are the primary factors determining the trajectory it tracks.

At the industry level, this divergence runs equally deep. Logistics and healthcare are using AI to augment their workforces while keeping core growth drivers intact. Professional services and data centers, by contrast, are restructuring delivery models around AI to produce more with leaner teams. Even as some sectors restructure toward smaller teams, headcount is not contracting in total, as globally, 60% of companies still plan to expand their workforces in the next 3–5 years, according to JLL's 2026 Future of Work Survey.

Another key point to note is that 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 labor exposure can still perform very differently. Office construction activity in U.S. 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," Bryant said. "The winners will be the investors who act on these signals now, ahead of the data."

Ultimately, navigating the AI-driven shift requires a new playbook. For investors, success now means acting on early labor market signals before transaction data can confirm the trend. For occupiers, it demands moving beyond static headcount to plan space around how work is actually performed — a more dynamic approach for a more dynamic era.

For more information, download the full Where AI is Changing Jobs and What it Means For Real Estate research.

About JLL

JLL (NYSE:JLL) is a leading global commercial real estate services and investment management company with annual revenue of $26.1 billion, operations in over 80 countries and a global workforce of more than 113,000 as of March 31, 2026. For over 200 years, clients have trusted JLL, a Fortune 500^® company, to help them confidently buy, build, occupy, manage and invest across a variety of industries and property types, including office, industrial, hotel, multi-family, retail and data center properties. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY. Powered by rich global datasets and leading technology capabilities, we provide coordinated, end-to-end delivery of real estate services for a broad range of global clients who represent a wide variety of industries. Through LaSalle Investment Management, we invest for clients on a global basis in both private assets and publicly traded real estate securities. For further information, visit jll.com.

Contact: Allison Olp

Phone: + 1 312 228 3128

Email: allison.olp@jll.com

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SOURCE JLL