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Real estate stocks have become the latest victim of the artificial-intelligence threat.

Commercial real estate brokers are selling off for a second straight day. CBRE tumbled 12.8%, a drop that Oppenheimer pointed out as especially alarming given that the only other times the stock has tumbled further was during Covid and the height of the global financial crisis.

Jones Lang LaSalle fell 11.1% and Hudson Pacific Properties shed more than 8%. In addition, Newmark slipped more than 5%, while SL Green Realty dropped 8% and BXP shed 5.4%.

“We believe investors are rotating out of high-fee, labor-intensive business models viewed as potentially vulnerable to AI-driven disruption,” Jade Rahmani, an analyst at Keefe, Bruyette & Woods, said in a note Wednesday.

That selloff reflects a grim mood as of late in the market, which has rotated sharply out of those companies most exposed to AI disruption — first in software, then in financial firms — for more defensive sectors such as staples.

On Thursday, trucking and logistics stocks also tumbled on the release of an AI freight scaling tool. Shares of C.H. Robinson Worldwide and RXO plummeted 20% and 25%, respectively. Shares of J.B. Hunt Transport Services slid more than 6%.

Now, investors are on the lookout for what sector will be the next domino to fall, and how long any panic selling can last.

AI disrupting employment

Commercial real estate has been under pressure for some time, as higher interest rates and the rise of remote and hybrid work in the wake of the pandemic cratered demand for office space.

Investors worry that AI could sound a death knell for the sector. That point was driven home in an essay that went viral earlier this week in which OtherSide AI co-founder and CEO Matt Shumer said entry level white collar jobs will be gutted thanks to AI. The impact will be bigger than Covid, he wrote. The essay garnered 30 million views in 24 hours, Shumer claimed.

Those remarks follow Elon Musk’s comments on a podcast last week in which he said that office towers once filled with workers will one day be replaced with AI.

“Corporations that are purely AI and robotics will vastly outperform any corporations that have people in the loop. Computer used to be a job that humans had. You would go and get a job as a computer where you would do calculations. They’d have entire skyscrapers full of humans, 20-30 floors of humans, just doing calculations. Now, that entire skyscraper of humans doing calculations can be replaced by a laptop with a spreadsheet,” Musk told the hosts of the “Dwarkesh Podcast” last week.

“That spreadsheet can do vastly more calculations than an entire building full of human computers,” Musk added.

The rout in real estate stocks comes on the heels of several other sectors being dragged down by AI disruption concerns. Software stocks took a hit earlier this year after Anthropic’s latest AI model appeared able to allow businesses to do legal work and build programs for which they would otherwise pay an expensive license.

Then wealth management stocks dove after the launch of tech platform Altruist’s new tax planning tool AI powered that promises to do the work “within minutes.”

Fears overblown?

Even so, many investors expect that the recent concerns could be overblown. Indeed, in spite of all the noise, fundamentals in real estate remain strong, Rahmani noted.

“While the threat of technology disintermediation is not new to the industry, the current sell-off may overstate the immediate risk to complex deal-making, even as the long-term AI impact remains a ‘wait-and-see,’” he wrote.

In fact, CBRE reported an earnings beat on Wednesday for its fourth quarter and issued strong guidance for the full year. Its core earnings came in at $2.73 per share, topping the consensus estimate of $2.68 a share, per FactSet. The company expects core EPS to come between $7.30 to $7.60, versus the $7.39 expected from analysts.

CBRE CEO Bob Sulentic pushed back against the perception that the company’s core businesses will be disrupted by AI, saying that the firm has built cost-effective AI tools to aid, but not disrupt, the work of its brokers. He added that much of the transactions CBRE oversees are complex, requiring the firm’s deep knowledge and breadth of relationships in the field.

“We’ve become quite confident that that business really is driven by this strategic creative thinking that our brokers do,” Sulentic said during the company’s earnings call. “And we think that’s going to continue to be the case, and we haven’t seen any evidence to the contrary.”

Barclays analyst Brendan Lynch is sticking with his overweight ratings on CBRE and Newmark and would buy the weakness.

“We see the harsh sell-off among the group as inconsistent with their earnings profiles,” he said in a note Wednesday.

“We do not dismiss this risk, but note that thus far AI has been a net job creator,” he wrote. “Further, CRE servicers stand to benefit, like many other companies, from both revenue growth opportunities and cost synergies.”

However, there could be long-term implications for businesses that don’t shift from using AI as another tool in their toolboxes to a core operating infrastructure of new business models, said Macquarie strategist Thierry Wizman in a note Thursday.

For instance, for financial services and real estate companies, outcome-driven AI agents would conduct all the end-to-end workflow, replacing the human-led ones, he said.

″[F]or companies that are slow to adopt, or have built customer models based on costly human-level discretion and interaction, that transition may be fatal,” he said.

Source: “Office real estate stocks tumble as AI disruption casualties in the stock market grow by the day“

U.S. commercial real estate lending surged at the end of 2025, signaling renewed momentum across large segments of the property finance market as interest-rate volatility eased and banks re-entered the arena with greater conviction.

Commercial and multifamily mortgage originations jumped 30% in the fourth quarter from a year earlier and climbed 25% from the prior three months, according to the Mortgage Bankers Association’s latest quarterly survey released at the industry group’s 2026 Commercial/Multifamily Finance Convention in San Diego. The data points to a broad rebound in borrowing activity after a muted 2024, though performance varied sharply by asset class.

“The final quarter capped a notably stronger year for commercial and multifamily lending,” said Reggie Booker, the MBA’s associate vice president of commercial and multifamily research. Depository institutions — including banks and thrifts — drove much of the late-year acceleration, he said, as steadier interest rates and improved pricing clarity encouraged lenders and borrowers to transact. Even so, Booker cautioned that demand remains “uneven across property types,” reflecting ongoing structural shifts in office and hospitality markets.

Office Leads Annual Gains Despite Quarterly Stall

Measured against the same period in 2024, originations expanded across most major property sectors in the fourth quarter, led by a sharp rebound in office financing. Dollar volumes for office loans nearly doubled, rising 95% year over year. Industrial lending increased 23%, multifamily rose 22%, and health-care properties advanced 20%.

Retail and hotel assets bucked the trend. Retail loan volumes fell 12% from a year earlier, while hospitality originations dropped 34%, underscoring lingering investor caution toward consumer-facing real estate and travel-dependent properties.

Banks Reclaim Market Share

Banks emerged as the most aggressive source of capital. Lending by depositories surged 74% from the fourth quarter of 2024, far outpacing other capital providers. Investor-driven lenders posted a 46% increase, while issuance of commercial mortgage-backed securities climbed a more modest 5%. Government-sponsored enterprises Fannie Mae and Freddie Mac recorded a 4% rise, and life-insurance companies edged up just 1%.

Quarter-to-quarter comparisons showed a similarly bank-led expansion. From the third to the fourth quarter of 2025, overall originations rose 25%, with industrial properties leading the advance at 29%, followed by multifamily at 17%. Health-care and hotel lending each ticked up 2%. Retail volumes fell 32% and office slipped 1%, suggesting that the sector’s annual rebound was driven largely by earlier-year transactions rather than late-year momentum.

Among lender categories, depositories again posted the largest sequential increase, with volumes up 54% from the third quarter. Life-insurance companies expanded originations 27%, investor-driven lenders rose 21%, and CMBS issuance grew 6%. Lending by the government-sponsored enterprises was essentially flat.

Full-Year Rebound Signals Broader Recovery

Preliminary figures indicate that total commercial mortgage originations in 2025 climbed 40% from 2024 levels, marking one of the strongest year-over-year recoveries since the pandemic-era disruption. Office financing recorded the most dramatic turnaround, soaring 146% for the year. Multifamily lending increased 36%, retail 27%, industrial 20%, and health-care 7%. Hotel originations declined 7%, the only major sector to post an annual contraction.

The recovery was broad-based across capital sources. Banks increased lending 74% for the year, investor-driven lenders rose 59%, government-sponsored enterprises advanced 27%, life insurers gained 23%, and CMBS volumes grew 8%.

The figures suggest that while the commercial property market remains bifurcated — with clear winners and laggards — capital availability improved materially in 2025 as rate stability returned and lenders regained confidence in underwriting conditions. Whether that momentum carries into 2026 may hinge on the durability of economic growth and the trajectory of borrowing costs.

Source: “Commercial Lending in the U.S. Surges 30 Percent in Late 2025“

Labor market conditions continued to weaken toward the end of 2025, as hiring slowed and revised data showed weaker job growth than previously reported. In response to these conditions, the Federal Reserve shifted toward policy easing, delivering multiple rate cuts at the second half of 2025. Inflation showed signs of easing, while overall economic growth remained resilient, supported by steady consumer spending. Financial conditions, however, have been slower to adjust, with borrowing costs only beginning to edge lower. As a result, the full benefits of monetary easing for investment and commercial real estate activity are likely to emerge gradually in the year ahead.

Office markets showed gradual stabilization, with demand improving from last year’s lows but vacancy still elevated and rent growth restrained by ongoing concessions. In multifamily, solid underlying demand contrasts with lingering oversupply, keeping vacancy high and rent growth at historically weak levels despite slowing construction. Retail conditions reflected cautious improvement, as demand recovered modestly and pricing remained comparatively strong, even while new supply and weaker segments weighed on the outlook. Across industrial properties, the cycle continued to cool, with excess supply pressuring vacancy and rents, though narrowing imbalances point to a slow move toward normalization.

Below is a summary of the performance of each major commercial real estate sector in December of 2025.

Office Properties

The office market showed early signs of stabilization in December, with demand finally turning slightly positive after a prolonged period of losses, even as overall conditions remain fragile. Vacancy edged higher, and rent growth softened, underscoring landlords’ continued reliance on concessions. Class A continued to anchor demand despite elevated vacancy, Class B showed steady improvement with relatively healthier fundamentals, and Class C remained under pressure but retained the lowest vacancy. Regionally, performance was uneven, with some large markets still losing tenants while others showed clear signs of improvement.

Multifamily Properties

The multifamily market continues to show resilient demand, but excess supply from prior construction remains a drag on fundamentals, keeping vacancy elevated and rent growth muted. Absorption remains steady, though new deliveries continue to outpace demand, limiting pricing power as the sector moves through a softer leasing period. Class A and B conditions have cooled, while Class C continues to outperform on rents despite ongoing tenant turnover. Regionally, large urban markets remain more resilient, while oversupplied Sun Belt metros continue to face pressure.

Retail Properties

Retail showed tentative improvement toward the end of the year, with demand turning modestly positive and rent growth remaining the strongest among major property types, supported by low vacancy. That said, conditions remain fragile as new supply continues to enter the market faster than demand, keeping upward pressure on vacancy. Performance varies by segment, with general retail holding up best, while neighborhood and power centers face weaker absorption despite relatively strong rent growth.

Industrial Properties

Conditions in the industrial market reflected a gradual rebalancing, with excess supply still present but pressures beginning to ease compared with earlier quarters. Vacancy moved higher, and rent growth slowed, reflecting a market still adjusting after several years of rapid expansion. While logistics properties continue to anchor demand and specialized facilities show pockets of growth, flex space remains under pressure. Even so, the pace of imbalance has begun to ease, suggesting the sector may be approaching a more stable phase as excess supply is gradually absorbed.

Hotel Properties

Hospitality performance remained stable in December 2025, with occupancy at 62.2%, still roughly 4% below pre-pandemic levels as remote work and softer corporate travel continue to weigh on major business markets. Even so, revenue fundamentals strengthened, with both ADR and RevPAR well above 2019 benchmarks, supporting healthy profitability. Investment activity cooled, however, as elevated borrowing costs and ongoing economic uncertainty tempered investor appetite.

Source: “January 2026 Commercial Real Estate Market Insights“

Younger multifamily residents are serious about seamless access, security and transparency. They want to know how data is used, who is allowed to enter a space and what controls are in place for a property’s visitors and deliveries.

For commercial property managers and real estate agents, understanding younger audiences is vital in appealing to the next wave of workers, renters and homeowners. Features such as app-driven interfaces and seamless integration have become essential to Gen Z clients. Their core expectations around transparency and technology are influencing their buying decisions and will be a deciding factor when it comes time to invest in property.

Access systems that emphasize transparency and intentionality help improve the appeal of residential buildings, commercial office buildings, hotels, schools and everything in between. These features will become mandatory expectations as Gen Z grows to encompass a larger share of the workforce and becomes a key decision-maker in real estate investments.

Few other demographics have driven such a shift in operational execution. Real estate professionals must incorporate emerging trends and account for modern sensibilities to maintain their position in the market.

Digital Natives in a Tech-driven World

Gen Z will soon account for 30% of the workforce, shaping trends and innovations driven by their evolving preferences.

Even the oldest members of this generation, at 28 years old, would have come of age during the rise of the smartphone. They have spent most of their lives a few taps and swipes away from viewing or buying whatever they want, and this ubiquity has shaped how they interact with both physical and digital environments.

In prior decades, consumer technology was either recreational or productive. Those raised in the late 2000s and 2010s have only ever experienced the modern blending of these categories, where mobile phones are used for everything from digital content creation to managing social media empires.

Research shows this cohort expects technology to be built into their everyday lives. Entering a building or managing deliveries in shared residential areas should be fast, easy to use and seamless. Properties that incorporate smart access credentials and centralized management platforms match young people’s preferences for smart buildings and data-driven ecosystems, positioning themselves as future-ready and responsive to evolving expectations.

Transparency as a Baseline

Having grown up in an environment shaped by social media and instant access to information, Gen Z is more than willing to verify claims and question processes before making a decision.

For real estate professionals, this translates into a strong preference for clear, upfront communication. Young renters want to understand why decisions are made, and vague information or unclear answers can create immediate feelings of distrust.

Their expectations of transparency are most visible in areas such as:

• Costs and fees: Clear breakdowns of figures such as rent, maintenance, utilities and additional costs build essential confidence early in the decision-making process.
• Access policies and building rules: Younger residents are serious about security. They want to know who is allowed to enter a space and what controls are in place for visitors and deliveries.
• Use of security technology and data: Though comfortable with robust security infrastructure, they expect to understand which technologies are in place and how data is handled.

Transparency, privacy and disclosure are crucial when it comes to CCTV cameras. It benefits building owners to openly communicate compliance and data retention standards, as well as responsible deployment considerations, particularly to younger tech-savvy tenants.

Proactive honesty and clear expectations align with Gen Z’s values, helping reduce hesitation throughout the leasing or purchasing journey.

Seamless Access Matters More Than Ever

Convenience is a double-edged sword. Mobile banking, electronic wallets and polished app-based services have instilled a reliance on speed among Gen Z, to the point that any friction can lead to frustration and abandonment. Control and confidence are easy to cultivate with intuitive, responsive systems.

Expedient design is a must for both tenant management software and physical ports of entry. Young renters prioritize systems that offer:

• Mobile-first access: Digital credentials and app-based interactions fit this generation’s idea of how everyday services should operate. Physical keys and manual processes seem slow in comparison.
• Consistent experiences across the building: Accessing their building or block should work the same way as entering a shared communal area, or amenities like on-site gyms, to reduce friction and confusion.
• Visible security: Technology like CCTV cameras reinforces a sense of safety and oversight, building trust with tenants while increasing operational awareness for security teams.
• Responsive resolution: Access issues, and more broadly any tenant queries, should be easy to log digitally and should provide clear updates on how and when the problem will be addressed.

The long-term appeal of property, be it residential or commercial, is tied to the adoption of smart building philosophies. Far from simply appealing to a growing market, these technologies leverage data and insights to help managers run their businesses, adapt dynamically to meet tenant needs and generate stakeholder value across the board.

Source: “How to Build Trust with Gen Z Tenants, Future Investors“