Brokerage shares extend declines
Commercial real estate companies have become the latest targets of investor anxiety tied to artificial intelligence. For a second straight day, brokerage and property-related stocks sold off sharply.
CBRE closed nearly 9% lower Thursday after plunging more than 12% earlier in the session. Jones Lang LaSalle fell 7.6%, while Hudson Pacific Properties lost almost 4%. Newmark and BXP each declined more than 4%, and SL Green Realty slid about 5%.
Jade Rahmani, analyst at Keefe, Bruyette & Woods, said investors appear to be rotating away from “high-fee, labor-intensive business models viewed as potentially vulnerable to AI-driven disruption.” The selling reflects a broader shift out of sectors perceived as exposed to automation risk, following earlier pressure in software and financial firms.
Contagion spreads beyond property
The market turbulence has not been limited to real estate. Trucking and logistics stocks tumbled Thursday after the release of a new AI-powered freight scaling tool. Shares of C.H. Robinson Worldwide and RXO sank 20% and 25%, respectively, while J.B. Hunt Transport Services dropped more than 6%.
Investors are now watching closely to see which industries could face similar pressure and whether the wave of selling proves temporary or signals a broader repricing tied to AI disruption.
Long-standing pressures meet new fears
Commercial real estate was already navigating higher interest rates and reduced demand for office space following the shift to hybrid and remote work. The possibility that artificial intelligence could shrink white-collar employment has deepened concerns.
An essay by OtherSide AI co-founder Matt Shumer that went viral this week argued that entry-level white-collar roles could be dramatically reduced by AI, potentially exceeding the economic impact of the pandemic. The piece reportedly drew tens of millions of views within a day.
Elon Musk echoed similar themes during a recent podcast appearance, suggesting that companies built purely around AI and robotics could vastly outperform organizations reliant on human labor. He compared the evolution to the disappearance of “human computers,” once employed in skyscrapers to perform calculations now handled by software.
Are concerns overstated?
Despite the sharp pullback, some analysts argue that the market reaction may be excessive. Rahmani noted that while technological disruption is not new to the industry, complex real estate transactions still depend heavily on relationships, judgment and negotiation expertise.
CBRE reported better-than-expected fourth-quarter results, with core earnings of $2.73 per share, topping estimates of $2.68. The company projected full-year core EPS between $7.30 and $7.60. CEO Bob Sulentic emphasized that AI tools are enhancing broker productivity rather than replacing it, adding that intricate deal-making remains driven by strategic thinking.
Barclays analyst Brendan Lynch maintained overweight ratings on CBRE and Newmark, calling the sell-off inconsistent with their earnings outlooks. While acknowledging potential risks, he observed that AI has so far functioned more as a productivity enhancer than a net eliminator of jobs.
However, Macquarie strategist Thierry Wizman cautioned that firms slow to embed AI into their core operations may face longer-term challenges. Companies reliant on high-touch, human-centered service models could be vulnerable if outcome-based AI agents begin managing end-to-end workflows.
