AI Revolution: Navigating the Future of Commercial Real Estate Investment

 

 

 

By Will Amorin, CRE Broker

March 20, 2024 

 🕘 1 minute read

 

In the ever-evolving landscape of commercial real estate (CRE), the advent of artificial intelligence (AI) stands as a beacon of transformative change. As AI technologies advance at an unprecedented pace, the implications for CRE investment are profound, particularly in the realms of retail and multi-family sectors.

AI’s Impact on Jobs and the Economy

The integration of AI into various industries has sparked discussions around job displacement. A report by Goldman Sachs suggests that AI could replace up to 300 million full-time jobs, potentially affecting a quarter of work tasks in the US and Europe. This seismic shift in the labor market may necessitate the implementation of universal basic income (UBI) programs to mitigate economic disparities.

Investment Opportunities Amidst AI Advancements

With the potential rise in joblessness, consumer behavior is expected to adapt. Individuals with newfound time and UBI support may increase their spending in retail, bolstering this sector as a lucrative investment opportunity. Moreover, the demand for multi-family residences is projected to surge, as the prospect of homeownership dims for many. These properties offer a viable alternative, promising stable returns for investors.

Retail and Multi-Family: The Investment Frontiers

The retail sector, rejuvenated by AI’s efficiency, could see a renaissance as shopping becomes a leisure activity for the jobless yet financially supported populace. Simultaneously multi-family real estate investments stand to benefit from the increased need for affordable housing solutions.

As AI reshapes the economic fabric, CRE investors are poised to capitalize on the emerging trends. By aligning investment strategies with the anticipated shifts in consumer behavior and housing needs, the future of CRE investing can be navigated with confidence and foresight.

This brief exploration into the impact of AI on CRE investing highlights the importance of staying alongside of technological advancements and societal changes. As we stand on the cusp of a new era, the intersection of AI, job markets, and UBI will undoubtedly play a pivotal role in shaping investment strategies for the years to come.