Wall Street property stocks tumble as AI reshapes office demand
Fears over artificial intelligence disruption have triggered sharp declines in property services shares, with analysts warning the sell-off may overstate immediate risks to the sector, even as mortgage lenders accelerate technology adoption.
Shares in commercial property services companies tumbled on Thursday following steep declines on Wall Street. Estate agent Savills’ shares fell 7.5% in London, while serviced office provider International Workplace Group lost 9%. British Land and Landsec, the UK’s two largest property developers, dropped 2.6% and 2.4% respectively.
On Wall Street, property service firms fell for a second consecutive day. CBRE shares plunged 12.5%, Jones Lang LaSalle lost nearly 11%, and Cushman & Wakefield fell 9.1%, after even sharper declines on Wednesday.
Commercial property stocks have become the latest sector hammered by AI fears, following a sell-off last week in legal software, publishing, and analytics companies, and this week in insurance firms and wealth managers.
The share declines were sparked by AI firms such as Anthropic, the company behind the chatbot Claude, releasing new tools, although there was limited news on Thursday.
AI has the potential to automate a wide range of office-based tasks, raising concerns over job losses and potentially reducing demand for office space—a blow to property companies.
Jade Rahmani, commercial real estate analyst at New York-headquartered Keefe, Bruyette & Woods, told The Guardian that investors were rotating out of business models viewed as potentially vulnerable to AI-driven disruption.
“We believe investors are rotating out of high-fee, labour-intensive business models viewed as potentially vulnerable to AI-driven disruption,” he said.
However, he believes the sell-off “may overstate the immediate risk to complex deal-making, even as the long-term AI impact remains a ‘wait-and-see’.”
Strong growth expected in 2026 despite AI disruption
Dallas-based CBRE reported fourth-quarter revenue of $11.6bn (£8.5bn), up 12%, and core earnings per share of $2.73, above analysts’ estimates. For 2025, revenues rose by 13% to $40.6bn.
The real estate services firm forecast 2026 profit above Wall Street estimates, citing strong momentum in leasing and facilities management, the rapid expansion of datacentres, and billions of dollars flowing into AI infrastructure.
CBRE’s chief executive, Bob Sulentic, believes AI will benefit the business in the long run, with its transaction and investment work “most protected” from disruption.
“Clients engage CBRE to plan and execute complex transactions because of our creativity, strategic thinking, negotiating skills, deep base of market knowledge, and broad relationships,” he said. “None of this seems likely to be replaced by AI in the foreseeable future.”
Firms increasingly adopt AI
Meanwhile, the UK mortgage industry is undergoing a parallel transformation. The Bank of England and Financial Conduct Authority reported that 75% of UK financial firms currently use AI, with another 10% planning adoption within three years, up from 58% in 2022.
The technology aims to address persistent inefficiencies in mortgage processing. Research shows that 89% of customers find the mortgage application as stressful as buying the home itself, with processing times averaging 45 days and 40% of the mortgage journey requiring human intervention.
Digital mortgage providers including Habito and Mojo Mortgages now deliver mortgage-in-principle decisions within minutes rather than days by analysing customer profiles across multiple lenders simultaneously. Foundation models account for 17% of AI use cases, whilst 55% of implementations include automated decision-making capabilities.
Stuart Cheetham, chief executive of MQube, said AI-driven technology, lender resilience, and operational efficiency would define the mortgage market in 2026.
“The first is making sure lenders, brokers, and borrowers get the best out of our next-generation AI-driven mortgage, making it quick, simple, straightforward, and easier to adopt,” he said. “We need to plug the AI educational gap.”
Cheetham added that AI would play a crucial role in assisting human intelligence but would not replace humans, instead enhancing productivity.
UK Finance forecasts overall gross mortgage lending to rise by 4% to £300bn in 2026, with 1.8m fixed-rate mortgages due to expire.
