CBRE Sees AI Office Demand Strengthening Prime Space

AI office demand could favor prime space as CBRE projects 0.9% annual office-job growth and falling vacancy through 2031.

September 11, 2026

Nina Dale

CBRE estimates only 5% of office-using workers are highly vulnerable to AI displacement, while 18% are highly adaptive.
Office-using employment is forecast to grow 0.9% annually over five years. The broader economy is projected at 0.6%.
CBRE’s baseline forecast puts US office vacancy at 14.5% by 2031. A severe AI downside case reaches only 18.7%.

Key Takeaways

CBRE Research argues that the AI office demand outlook is more resilient than broad automation fears suggest. In its analysis of AI and office demand, the firm says demographic constraints matter more than automation for near-term job growth. It expects AI-related productivity to favor highly skilled, collaborative roles that use offices more often.

AI Risk Looks Smaller Than Feared

CBRE sees labor supply, not artificial intelligence, as the bigger constraint on office job growth. Private-sector layoffs are near their lowest level since 2013, while hiring has slowed more sharply. Roughly 83,000 workers are retiring each month, and reduced immigration is further limiting labor-force growth. Office-using employment is forecast to grow 0.9% annually over the next five years. That is below the 1.5% long-run average but above the broader economy’s projected 0.6% rate.

US job openings, hires and separations from 2008–2026, showing hiring slowing while job openings remain above hires.

CBRE attributes the slower pace mainly to demographics rather than widespread AI displacement. CBRE also points to previous technology cycles. After the internet and smartphone arrived, office-using jobs posted their largest share of overall employment growth since at least 1990. Office-using industries generate more than twice the national average output per employee, giving the report another reason to expect productivity gains to favor office-heavy sectors.

The Details

Only 5% of office-using workers are considered highly vulnerable to AI displacement, while 18% are highly adaptive. The remaining 77% face varying degrees of change without being classified as highly vulnerable. CBRE argues that many workers exposed to disruption also have the skills to capture AI-driven productivity gains. The report also separates routine remote work from collaborative office work. Fully remote roles account for about 13% of the US workforce and are more vulnerable to automation.

A Live Data Technologies analysis of 2M white-collar workers found fully remote employees were 35% more likely to be laid off in 2023 than hybrid or in-office peers. Workforce composition varies sharply by market. San Jose and San Francisco rank as the least vulnerable metros, followed by Washington, D.C., Seattle and Boston. New York has the least exposed financial-services workforce among major US metros. San Francisco, Washington, D.C., Austin, Boston and Denver also have resilient professional and technical services workforces.

San Jose has the lowest share of occupied office space at risk from AI, followed by San Francisco and Washington, D.C.

Technology leasing is already concentrated in major hubs. Tech companies represented 21% of US office leasing in H1 2026. Nearly two-thirds of that activity occurred in the San Francisco Bay Area and Manhattan. Lease terms have also lengthened among technology occupiers, especially larger users.

Why It Matters

CBRE’s argument is that AI may change where office demand concentrates more than it changes the total number of office jobs. Routine tasks are easier to automate, while complex and judgment-heavy work benefits more from in-person collaboration. That could increase space per worker even if employment growth remains modest. Office-using employment has been flat since AI tools spread broadly in 2023, but occupied space per worker has increased. AI is also lowering barriers to business formation, which can support smaller occupiers and flexible-space providers.

Tech leasing is reinforcing AI-driven office leasing in markets with the deepest talent pools. The result favors prime buildings and major business hubs. CBRE expects highly skilled workers to remain among the least exposed to displacement. Those workers are also the users most likely to value high-quality space, supporting the market’s existing split between prime assets and obsolete stock.

What’s Next

CBRE expects the US office market to effectively run out of prime space by the end of 2027 because new construction pipelines have fallen sharply. Its baseline forecast puts overall vacancy at 14.5% in 2031, down from 18.3% today, with urban hubs leading the improvement.

CBRE projects office vacancy falling under its baseline, while a severe AI downside scenario keeps vacancy near 18% through 2031.

The firm’s severe downside scenario assumes every highly vulnerable office worker is displaced and currently contributes to office demand. Even under that assumption, vacancy reaches only 18.7% by 2031. CBRE expects location and industry mix to determine winners, with prime assets gaining while secondary space faces faster obsolescence.