Real estate stocks sink as worries about AI risks spread

Commercial real estate stocks nosedived Thursday as traders worried about risk to demand for office space from higher use of artificial intelligence tools, broadening a selloff that began Wednesday in small corner of the market.

Shares of CBRE Group , a major commercial real estate services company, fell 8.8%, bringing the two-day decline to 20% in the worst such move se 2020. Jones Lang LaSalle fell 7.6% Thursday, Cushman & Wakefield Ltd. dropped 12% and Newmark Group slid 4.2%.

An index tracking stocks of office real estate companies retreated 4.2%. Major decliners in the index lude SL Green Realty Corp, Cousins Properties , Kilroy Realty Corp. and BXP.

“Concerns about reased use of AI applications translating into reduced demand for office space have been around for some time, this is not new,” said Jeffrey Langbaum, an analyst covering office Reits for Bloomberg Intelligence.

“However, after yesterday’s selloff in the brokers, we are seeing the fear spill back over to the actual office space providers.”

The two-day selloff across real estate stocks is among the latest in what analysts are calling the “AI scare trade.”

“We’re in a bit of a ‘ready fire aim’ environment in financial services in general, with investors reacting sharply to even modest earnings misses given widespread fears of AI disruption,” Morningstar’s Sean Dunlop said.

Investors’ concerns about AI disrupting business models have intensified following the rollout of new tools by startup Anthropic. It has led to steep selloffs in several corners of the stock market over the past couple weeks — starting with software makers, then moving to private credit companies, insurers, wealth managers, real estate services and logistics firms.

“The market is pricing in the potential for mass office-using job losses as a result of AI,” said Jefferies analyst Joe Dickstein.

On the other hand, analysts and investors have warned that some of the recent steep selling reflects a knee-jerk reaction from traders and could be overestimating the risks.

© 2026 Bloomberg

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