Artificial intelligence is expected to generate roughly 330 million square feet of additional commercial real estate demand in the United States over the next decade, according to new analysis from Cushman & Wakefield.
The firm's scenario-based study finds that the technology is likely to be an additive to real estate demand, expanding economic output and ultimately increasing space needs across office, industrial, retail and multifamily property types.
Rather than forecasting a single outcome for AI adoption, the analysis models multiple economic paths, ranging from steady productivity-driven growth to more disruptive scenarios involving slower adoption or labor displacement. Across those scenarios, the baseline outlook — assigned the highest probability — points to continued expansion in overall space demand.
In that baseline case, total U.S. net absorption rises from a pre-AI forecast of 2.7 billion square feet to just over 3 billion square feet over the next decade, a net increase of about 330 million square feet or 12.2%.
The impact is expected to vary significantly by property type. Industrial demand shows the largest increase, followed by office, which is projected to see near-term softness before stabilizing as new industries and firms emerge. Multifamily and retail are also expected to see modest but positive gains tied to broader income and employment growth.
"The headline from this research is clear: AI will be disruptive, and there will be some displacement, but it will also create new businesses, which we are already seeing in the data," said Kevin Thorpe, chief economist at Cushman & Wakefield. "Ultimately, AI is an additive to real estate demand."
Still, the near-term outlook is more restrained. The report expects AI adoption to temporarily moderate hiring as companies prioritize productivity gains over headcount expansion, particularly in office-using sectors.
Office demand is expected to lag in the short term as firms recalibrate staffing needs and space utilization. However, the report suggests that longer-term demand will be supported by new business formation and the emergence of AI-enabled industries that expand overall economic activity.
"It's important not to lose sight of the supply side when assessing the outlook for office," said James Bohnaker. He noted that while new office construction has slowed significantly compared to historical norms, demand is increasingly concentrating in higher-quality, more adaptable space.
The report also highlights a growing divergence in performance across property types and markets, with outcomes increasingly dependent on asset quality, adaptability and local labor dynamics.
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