AI & the Labor Market: Examining the Impact to Office REITs

Research evidence excerpt

AI & the Labor Market: Examining the Impact to Office REITs

Deutsche Bank

Research

North America Industry Date

REITs REITs 18 June 2026

AI & the Labor Market: Examining the Impact

Peter Abramowitz to Office REITs

Research Analyst

+1-212-250-9504

Key Takeaways

The impact of AI on occupier headcount and space demand is the most often Omotayo Okusanya

debated topic for Office REITs today. With the help of a recent piece from the DB Research Analyst

+1-212-250-9284 Economics team, we took a deeper dive into AI’s impact on the labor market, and

what it means for office landlords going forward.

To date, we think the trends for office are encouraging. Notably, the majority of

companies (44% of respondents to a gov’t survey, Figure 2) indicate they are

using AI to supplement or enhance employee tasks, rather than perform tasks

previously done by an employee (10%). To us, this bolsters the argument that AI

will boost productivity rather than replicate current output with less headcount

(the worst-case scenario for office demand). Further, 96% of companies say they

have not changed their headcount in the last 6 months as a result of AI (Figure 3).

There’s been little evidence of broad-based layoffs across the economy (Figure

5), although there is some emerging evidence of a correlation between layoff rate

and AI adoption by industry (Figure 7).

In summary, we believe this supports the idea that leasing demand will remain

solid through the rest of the year for Office REITs. We found recent conversations

at NAREIT constructive, as management teams unanimously agreed that leasing

conversations haven’t been negatively impacted by AI, and that adoption has

been net additive to demand YTD. The caveat is that this can change quickly as