Artificial intelligence may be fueling fresh demand for office space today—but by the end of the decade, the momentum could easily slow. According to a new Newmark report, AI is poised to act as a headwind to labor-driven office demand through 2030, as automation reshapes how people work and where companies need space.
Newmark's base-case forecast projects office-using employment growth to remain essentially flat—rising only 0.3% from 2026 to 2030. In that scenario, the national office vacancy rate would edge up about 10 basis points from late 2025 levels, reaching approximately 21.5% by the decade's end.
The firm's alternative scenarios suggest a range of outcomes, with vacancy near 19.5% in the most optimistic case and as high as 23.5% in the downside view.
For now, AI and related industries—cloud computing, data infrastructure, semiconductors and specialized hardware—are spurring pockets of new office demand. The report notes that this surge remains concentrated in the San Francisco Bay Area but is beginning to spread into other major talent markets, including Manhattan, Seattle, Los Angeles and Austin.
On the surface, early signs of AI-driven job disruption appear subtle.
"You really have to zoom in on the data to see it," Jessica Morin, head of occupier research at Newmark, told GlobeSt.com.
"The impact shows up in a narrow band of early-career and highly exposed office roles, even as knowledge jobs shift more broadly. "Those early indicators of displacement among younger workers will likely grow over time, while other changes ripple through all types of knowledge work, regardless of experience level or pay."
Morin said as employees increasingly work alongside AI, their time will be redirected toward higher-value, human-focused tasks.
"The tasks workers spend their time on today will look different as people increasingly work alongside AI, freeing them up for higher-value critical thinking and relationship work—work where humans have the advantage," she said.
Still, Morin warned that short-term decisions could have long-term consequences.
"I also see potential trouble ahead if firms rush to cut costs by leaning too hard on new efficiencies and shedding early-career workers," she said.
"If companies hollow out their entry-level pipeline now, they'll feel it later when today's senior workers and leaders retire, and there's no experienced talent they can tap into."
Despite these near-term risks, Morin sees reasons for optimism.
"Some jobs will be displaced in the near term, but AI also lowers the cost and friction of starting and scaling new businesses, so we're likely to see entirely new firms, services, and job categories emerge," she said.
According to the report, the office roles most at risk involve routine, repetitive and easily automated tasks—largely entry-level positions. By contrast, higher-skill, relationship-driven jobs stand to be supported, not replaced, by AI tools.
As automation trims space requirements, generic back-office environments are likely to face greater pressure, while modern, collaboration-oriented workplaces prove more resilient.
Newmark concludes that companies will need adaptable work environments that promote culture, well-being and talent attraction as the structure of work evolves. For building owners, long-term resilience will depend on curating high-quality properties in strong locations with diverse, innovative tenant mixes and assets capable of outperforming even as AI reshapes demand.
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