main
Presented by JLL San Diego and JLL GPTThe potential of artificial intelligence (AI) to revolutionize businesses, industries, and society has been growing for decades. Recent advancements have brought AI from a niche field to the mainstream, prompting corporate leaders to consider the opportunities and threats that AI presents for their future.While real estate professionals acknowledge AI as a game changer, the exact implications for the industry are not yet clear. However, leaders recognize the impending change and continue to explore ways to harness AI’s transformative possibilities.Here are three perspectives on how AI will transform real estate:1. AI will revolutionize how people live, work, and playOpenAI estimates that around 80% of jobs are at risk of disruption due to AI. This has raised concerns about potential upheaval in the real estate market as labor demands change. While some jobs may become obsolete, AI will also create new opportunities. Goldman Sachs draws on a study by MIT economist David Autor to reveal that more than 85% of employment growth in the U.S. over the last 80 years is explained by the technology-driven creation of new positions.According to JLL research, San Diego is projected to see a 6% increase in labor demand thru 2030 in an AI-driven economy. Additionally, in the past decade, the number of high-tech jobs has grown by 16,816, reaching a total of 67,880 in 2022. Since 2020, San Diego has ranked third in the country for tech job growth, with a rate of 9.1%. Growth is likely to persist in cities like San Diego, where there is a presence of AI talent in tech hubs, innovation centers, and universities.
Labor_Demand.jpg
2. AI growth will drive demand for real estateThe AI ecosystem extends beyond foundation model developers like OpenAI. Companies involved in semiconductor hardware, cloud computing platforms, model hubs, and application development represent a growing occupier segment. As more companies emerge and pre-trained foundation models are customized for specific use cases, the demand for real estate from the AI sector is expected to increase. Based on our research, the growth of AI is expected to drive increased demand for real estate in this sector, with an estimated total of 17.2 million square feet by the end of this year in the U.S. alone. Currently, San Diego’s AI footprint stands at 327,000 square feet, but it is projected to expand further. This projection aligns with the fact that San Diego has secured more than $1.2 billion in venture capital for AI since 2020, earning it a ninth place ranking nationwide in terms of total AI funding.
AI_Footprint.jpg
3. AI will build upon the technological transformation initiated by PropTechThe real estate industry has been actively adopting new technologies, with over 80% of real estate occupiers, investors, and developers planning to increase their real estate technology budget in the next three years. PropTech has laid a solid foundation by providing technological solutions for various aspects of real estate functions. This sets the stage for AI integration, as AI can complement and enhance existing PropTech solutions, leading to further advancements in investment management, design and construction, building and facility operations, and portfolio management.Overall, AI is poised to have a transformative impact on the global real estate market, driving innovation, improving productivity, and reshaping business models across industries. By leveraging AI technologies, businesses in San Diego can gain a competitive edge and position themselves for growth in the evolving real estate landscape.Want to learn more?Read how JLL is delivering AI solutions to unlock the potential of the world’s buildings and its people here.About JLL San DiegoJLL knows San Diego commercial real estate: past, present, and future. Since 2017 alone, JLL San Diego has brokered 2,329 lease transactions exceeding 33.3 million square feet of commercial space and sold or financed 406 transactions totaling over $16 billion in value. Our trusted advisors have the local market knowledge and expertise to support any business owner or building owner with their commercial real estate needs. Learn more here.
