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AI’s Nuanced Impact On The Workspace Will Be Bigger Than Covid In The Long Run

AI will change the way we use offices, and it will be the tool to help CRE understand those changes too. The shape of the post-pandemic office, adjusting to the contours of a more remote workforce and reopening pressures, is still in flux. For many in commercial real estate who embrace the potential of AI and automation to change the industry, these new technologies will help make sense out of some of the chaos. 

“What we’ve seen over the last year is the office is being redefined, and employers are stepping back and trying to understand the purpose of physical space,” Cushman & Wakefield Global Innovation Hub Head Kathleen Cahill said. "The commonality is that physical space needs to drive more value to employers and occupiers, and technology is the main way to do that. There’s no magic formula.” 

AI and automation will have a greater impact on white-collar workers than many expect.

A wave of automation and artificial intelligence adoption by larger firms is expected start reshaping both who works in offices and what they are doing amid a widespread return to the office.

A 2020 survey by Deloitte found that 8 in 10 corporate effects had already implemented some form of robotic process automation, or RPA, a multibillion-dollar industry dedicated to automating repetitive tasks, increasing efficiency and decreasing expenses.

Companies such as UiPath, Automation Anywhere and Blue Prism are helping Fortune 500 firms such as Coca-Cola and Walgreens eliminate mundane aspects of work, which may have the side effect of eliminating some positions, though recent NYU research argues it’s more likely to shift workloads and augment workers.

Mark Muro, policy director at the Brookings Institution’s Metropolitan Policy Program who has long studied the economic impacts of AI and automation, said he believes the technology will become more pervasive in the office going forward. It will stimulate productivity, allow professionals to get more done and could even improve wages. But it will be very disruptive, especially to white-collar professional occupations, despite much of the widespread cultural belief that robots will mostly replace low-wage work.  

Efficiencies around planning-and-analysis-oriented positions such as marketing, middle management, interpreting health scans and tests, will create a significant impact within industries such as tech, professional services, law and finance, all of which account for a significant percentage of office tenants.  

“AI is going to be a white-collar and professional tool, meaning it may further empower office workers and give them additional tools but also may introduce more dislocation as we get back to the office,” Muro said. 

It is that disruption across industries large and small that will dramatically impact the commercial real estate world. More efficiency, potentially fewer workers, and a renewed focus on nonautomatable tasks that are creative and collaborative will mean different orientations and utilizations of office space.

Kate Lister, president of Global Workplace Analytics, a consulting firm, told Recode typical offices oriented around 80% of floor space for personal use will instead be 80% collaborative. Cushman’s Cahill said that combined with the growth in sensors to help monitor how space is being used, these tech trends mean CRE needs to provide clients with data-driven plans for office space with a focus on collaborative workspace and hybrid schedules.

“It’s not that tech ultimately solves the problem,” Cahill said. “What tech including AI and automation are doing is providing more data to make those decisions.” 

A more automated office means more focus on collaborative space and less personal room for workers.

Muro said he believes that as AI and automation continue to filter into the broader economy, much of the drudge work will be done by off-the-rack tech, making work focused on interpretation and ideation more important. 

“An office doesn’t need to have a quiet place to crank out reports,” he said. “It’ll be a place for collaboration. And with the whole hybrid office concept coming into focus, that probably leads to both a change in the office layout, favoring places for meetings and interactions, and a shrinkage of the office footprint.” 

On a broad level, Muro said, the industries that are the most digital will, not surprisingly, adopt AI more wholeheartedly. This includes industries like tech, professional services and finance, making them more productive, profitable and perhaps spurring on additional hiring. The embrace of AI could accelerate tech-driven inequality and the concentration of firms, workers and workspaces in certain cities. 

AI won’t just impact how we work but how buildings work for us. Cushman’s Cahill said she sees a sharp growth in tenant experience apps, which will help users book amenities, access meeting rooms, and manage overall inflow and outflow of workers. Folding in the more complicated utilization patterns of remote workers and hybrid schedules will be accentuated by software and hardware utilizing AI. 

The challenges of office operations have greatly accelerated, said Peter Miscovich, a managing director at JLL focused on strategy and innovation. The last decade’s rise in more mobile workers and flexible office space will seem quaint compared to what awaits post-pandemic. AI, he argues, will be key to managing millions of workers across multiple sites and locations, ensuring everybody’s workplace needs are being provisioned in an effective manner. He said he foresees that scaling significantly in the next five years and pointed to upcoming development projects in major cities in the U.S., Australia, China and elsewhere focused on utilizing AI-driven smart technology. 

How will both an evolving workplace and new operation challenge impact the CRE workforce? For one, Cahill said she sees a dearth of high-level talent with a mixed background. CRE has many experts at managing physical space, but few also understand and are fluent in tech and data. Those who can master both skill sets will be highly coveted. 

“We all interact with tech and expect it to work for us day to day,” Cahill said. ”Real estate is catching up to that, and the tech is progressing tremendously to solve real pain points in real estate.”