How AI Could Impact Commercial Real Estate
Nearly a quarter of all U.S. jobs are at risk of being replaced by artificial intelligence according to a report from the Brookings Institute.
“Professions that are often about analytics, number crunching, performed by midlevel individuals…that stuff will be at risk,” said Mark Muro, Brookings Institute Senior Fellow who authored the report. “Some of this back-office [work] is what disappears, and that involves a lot of real estate.”
The loss of office-using employment, particularly during a time where companies are consolidating their real estate and offering less space to employees, could be risky for office building investors. This could leave investors with vacant space that is difficult to fill up.
Toledo, Ohio ranks as the top U.S. market where jobs run the risk of being replaced by AI and automation according to Brookings. The city’s top employers include ProMedica Health Systems, Mercy Health, Whirlpool Corp. and FCA USA.
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OA Development partner Brian Granath, which owns $350 million in commercial real estate focused on suburban office parks, said he looks at the underlying education of local demographics before purchasing a property.
“It’s very important that the areas we’re investing in have a positive long-range horizon so the employers will want to be there,” said Granath.
Still, the rise of AI will create more jobs and reskilling opportunities for companies. With this, companies looking to attract top talent will need to make sure their office offers many amenities and services.
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