The shift from incremental digital change to systemic AI-driven transformation

The real estate industry is moving:

• From real estate as product to real estate as service
• From design-intent to operational evidence
• From human OR machine to human AND machine
• From satisfying needs to creating desire
• From providing space to enabling performance

In early 2022 I wrote a presentation, ‘10 Things that matter in the future of real estate’. Later that year ChatGPT was released, and since then AI has been the talk of the town. I’m revisiting my ’10 Things’ to see if anything has fundamentally changed.

The answer is yes and no. Some themes have been turbocharged, whilst others have been given new ‘superpowers’. In essence the shift is that today it’s less about incremental digital change and more about systemic AI-driven transformation.

The 10 Shifts at a Glance

• Sustainability → Transparent, measured performance
• Smart → Assurable automation
• Flexibility → Adaptable + anti-fragile assets
• Human + Machine → Human + Agent synergy
• Productivity → Multiplication + superteams
• Wellbeing → Cognitive comfort
• Skills → AI fluency + judgement
• Brand → Hyper-personalisation
• Networks → Ecosystem orchestration
• Innovation → Building a bigger economic pie

These shifts are interconnected: operational transparency enables productivity measurement; cognitive infrastructure enables human+AI performance; service delivery models capture the resulting value. Read them as a system, not a checklist.

Let’s look at these through three lenses.

PART I: THE MEASURABLE PERFORMANCE IMPERATIVE

(Why traditional real estate metrics no longer capture value)

The following three themes represent the shift from design-intent to operational evidence. They determine whether your asset survives the decade. Everything that follows determines whether it thrives.

1. Sustainability (2022) → Sustainability & Transparent Performance

Three years on from citing ‘Sustainability’ as a key theme it has become clear that green-washing got out of hand. So much virtue signalling about doing the right thing got caught out for being just that - virtue signalling. With no real heft behind it. This unfortunately gave the culture wars warriors liberty to decry the whole sustainability movement and as we’ve all seen, being ‘green’ is seen by many as a vice rather than virtue. As a result many corporate leaders have now sought to frame being unbothered by sustainability as the new reality.But reality is reality and sustainability cannot be ignored. What is now needed is less interest in design-intent - the expected performance of a building based on its design assumptions, models and specifications, before it is occupied or operated - and a much greater focus on operational reality. We know this building ‘should’ perform in X manner - but does it? The Better Buildings Partnership has written about how ‘actual energy performance has no correlation with the EPC ratings of office buildings’We need more NABERS style assessments:

• Where you don’t get credit for promises; only for proven performance.
• Where certifications shift from “predicted” to “measured”.
• Where valuation models shift from EPCs to kWh/m², CO₂/m² etc
• Where smart building claims must be auditable.
• Where sustainability claims must be meter-verified.
• Where adaptability must be demonstrated in practice, not just stated in design briefs.

And we need to shift capital and due diligence in this direction, and plan for pricing performance uncertainty at 10-20% discounts, whilst rewarding proven operational excellence. I.e we need to put our money where our mouth is. Prove it or suffer the consequences.

2. Smart (2022) → Assurable Automation (‘The New Smart Building')

The same applies to the notion of ‘Smart’. The value premium needs to shift from "having sensors" to "having auditable, cyber-secure systems that prove they deliver stated outcomes.”

We must make auditable, integrated building data platforms the new table stakes for institutional financing, treating unverifiable performance claims like missing financial statements.

Imagine a building with fully integrated, auditable data systems: every sensor, every system, every performance metric available for instant verification. Due diligence that currently takes weeks assembling data of questionable provenance becomes immediate access to cryptographically verified operational history. This is what 'assurable automation' means: not just sensors, but transparent, tamper-proof performance records that buildings can provide on demand. That's what we really need.

3. Flexibility + Resilience (2022) → Flexibility + Adaptability + Anti-Fragile

The requirement for real estate to be flexible and resilient was clear in 2022, but now, in 2025, we seem to be in a world where "No one knows what happens next." So our buildings face speedy obsolescence if they are designed for single-use and/or with limited flexibility. Adaptability is now a measurable financial asset.

So we need to explicitly value and design for structural and systems adaptability, and perhaps accept that 5-8% of additional capex will be required to protect against far greater drops in value if the future pans out in unexpected ways, which is almost inevitable.

Nassim Taleb coined the phrase ‘anti-fragile’ and it means system that becomes stronger when exposed to volatility, shocks or stressors. Not resilient, not robust, but improved by stress.

In real estate this means changing our thinking from stable, predictable, single-use and optimised for the average case, to being structurally, operationally, and economically designed to adapt. To being real estate that becomes more valuable when the world is unpredictable. So we need buildings that can be reconfigured quickly and cheaply when needs change. Think long spans, loose-fit floor plates, modular services, over-specified power & risers, demountable partitions, accessible infrastructure. Volatility becomes an opportunity (new uses, new layouts, new tenant segments), rather than a threat.

PART II: THE HUMAN PERFORMANCE MULTIPLIER

(How AI reshapes work and what buildings must enable)‍

These four themes address the fundamental question: what happens inside your building that couldn't happen elsewhere? As work becomes location-independent, only buildings that demonstrably enhance human+AI performance justify premium pricing.

4. Human + Machine (2022) → Human + Agent + AI Synergy

Three years in to the generative AI revolution, work is restructuring around human+AI teams. In 2022 we spoke a lot about humans and machines but mostly as separate, distinct entities. Today it’s become clearer that we’re moving to a world where humans and machines are going to work together much more holistically, more as cyborgs than centaurs. We’re entering the ‘Agent Boss’ era where each of us will have a series of virtual ‘agents’ to curate and manage.

In this world, cognitive support infrastructure becomes as important as physical infrastructure.

What does this mean? Think of it like this;

Physical infrastructure supports bodies.Cognitive infrastructure supports minds.

Historically, offices have been optimised for desks, lighting, HVAC, lifts, meeting rooms and amenities. But in an AI-native world, what differentiates space is not its physical provision, but how well it enables thinking, decision-making, collaboration and AI-augmented workflows. This is what “cognitive support infrastructure” refers to: the spaces, systems and conditions that enhance human + AI performance.

‍So a building must be able to sustain exceptional environmental conditions (IAQ, high-performance acoustics, circadian lighting etc) AND provide digital/AI native infrastructure. Meaning guaranteed high-speed bandwidth, low latency, seamless device switching, local compute or edge environments for sensitive models, secure data access to building systems, integration with the BMS, tenant platforms and digital twins.

Companies ready, willing and able to pay premium rents in the future will be AI-native, so our buildings need to become the physical base-layer for these organisation’s AI operating systems.

5. Productivity (2022) → Productivity Multiplication + Superteams

Productivity is an area that has, under the radar, exploded since 2022. AI is not yet showing up in national productivity figures but we are seeing many examples of early adopters achieving very significant individual productivity gains. GitHub reports 55% faster completion rates for developers using Copilot; legal document review has compressed 70-80% in early adopter firms; customer service automation shows 40-60% capacity gains at scale.

It is hard to think of unchallengeable reasons why this won’t spread more widely amongst ‘knowledge workers’.

In the same vein, recent research from Eric Brynjolfsson, Stanford Professor, suggests that entry-level knowledge work, the tasks most exposed to AI automation, is seeing measurably slower hiring growth. While macroeconomic factors complicate attribution, the pattern aligns with early displacement hypotheses.

This gives one a steer as to where all this is going. Towards two potential real estate related scenarios:

(1) Companies need radically less space, or(2) Companies achieve same goals with smaller teams.

Both reduce office demand.

Whilst it does seem clear that premium space for high-performers remains valuable, and in much demand, it is undoubtedly the case that for a given level of output companies will be requiring fewer employees.

Which means we should prepare for a 15-25% demand reduction in high-exposure sectors, by repositioning from space provision to productivity enhancement, developing outcome-based pricing models that charge for performance rather than area.

Selling by the square foot is going to undervalue the very best space.

6. Health + Wellbeing (2022) → Wellness + Cognitive Comfort

The above means that we need to double down on ‘Health + Wellbeing’. We’ve known for a long time that indoor environmental quality directly affects cognitive performance, but historically that hasn’t been something most occupiers were all that bothered about. But in a much more aggressively AI mediated business world ‘cognitive comfort’ is likely to represent a key factor in a businesses success, because it affects employees output much more directly than it has to date. So buildings that measurably improve focus, decision-making, and mental stamina justify premium pricing. This is no longer amenity; it's core value proposition.

7. Skills (2022) → AI Fluency + Judgment

All of which means that the focus we had in 2022 on ‘Skills’ was correct but needs tweaking in light of the rise of AI.

The real estate industry faces a skills crisis. Traditional "real estate + spreadsheets" expertise is insufficient, not least of all because much of this work will be commoditised, if not entirely automated. Going forward we need people with very strong human skills, exceptional critical thinking, an ability to work through and solve complex, novel problems, and know enough about data science to be able to create and curate the aforementioned ‘Agents’ we’ll be working with.

This requires both workforce development, training existing staff in AI-augmented workflows, and non-traditional hiring from adjacent sectors. Firms without AI-native capabilities face competitive stress within 2-3 years as early adopters achieve productivity advantages that compound over time. The talent war is shifting from 'real estate expertise' to 'real estate expertise + AI fluency + design thinking.' Firms slow to recognise this will find themselves unable to compete for either talent or mandates.

If buildings can prove performance (Part I) and enable human+AI productivity (Part II), how do they capture this value? Through service delivery models that shift from product to platform.

PART III: THE SERVICE DELIVERY MODEL

(How real estate competes when space is optional)‍

These three themes represent the shift from real estate as product to real estate as service. They determine customer lifetime value, which now matters more than lease length.

8. Branding / Experience (2022) → Hyper-Personalisation + Human-Centric Experience

The idea of Brand being something worth getting stuck into was relatively new in 2022. For much of my career the mantra was always ‘you cannot brand real estate’. Which always struck me as bizarre, but was pretty much taken as gospel within the industry. The rise of WeWork (irrespective of the eventual outcome) and then Covid turbo-charged remote and hybrid working finally put a nail in this coffin. Of course you could Brand real estate - and branded real estate was what people actually wanted. ‘Flight to quality’ is all about Brand.

The difference today, as a result of the capabilities of Generative AI is that branding can be hyper personalised and spaces can be customised for individuals in far more granular ways than was previously even considered. In fact as AI increasingly handles routine work, authentic human connection becomes the premium offering - what I've called​ #HumanIsTheNewLuxury​: the irreducible value of being in the room when creativity, judgment, and serendipity matter most. Real estate companies competing on experience differentiation, not location or specification, might well be the new normal.

So we need to be allocating far more budget to curation, programming and hospitality capability that creates defensible brand differentiation.

9. Relationships, Networks, Ecosystems (2022) → Ecosystem Orchestration + Community

It was clear in 2022 that each of us working in real estate had to work hard on building relationships, networks, and an ecosystem of other people and companies we could work with to deliver the full range of products and services our customers were demanding. In 2025 and beyond this trend is widening and becoming deeper.

We will increasingly be looking for the real estate we work in, or visit, to become part of this process. As the requirement to actually be in an office five days a week becomes ever less relevant we want more out of it when we are. Who else is here, what services can be accessed, what opportunities emerge from proximity to others? In this era space activation becomes more like space orchestration.

The building, and those operating it, need to understand who they are trying to attract and how they might assist in enabling them to do things they could not do elsewhere. It’s the idea of ‘​Real estate as Maven​’ - the space becomes an enabler of connection. The building becomes a matchmaker.So significant budget needs to go towards facilitating shared events, and building opportunities to actively bring people together. What are people interested in, what are their motivations, what do they need to know and who do they need to meet.It feels like a massive ‘brand extension’ for real estate but then real estate needs to make people want to be there. They no longer need to.

10. Innovation (2022) → Innovation + ‘Building a Bigger Pie’

Finally, the need for innovation, rightly considered a key aim in 2022, has become massively more important. As mentioned earlier, for a given level of output it is a certainty that businesses will require fewer people. So we absolutely do need to be actively working towards ‘building a bigger pie’.

Without innovation and the creation of new products and services we will reach a pretty dark place, with a lot of people under or unemployed. Incremental improvement is insufficient. Industry needs genuine innovation to create new value (not just capture existing value). We need to build!

AI is a bug and a feature in all of this. It might not eradicate many jobs entirely, but it will mean every job becomes reconfigured and each individual will be able to do far more. So jobs will go. On the other hand, each of us is being given intellectual firepower beyond our wildest dreams. The cost of intelligence is trending towards zero, and this is giving all of us, potentially, superpowers. We have unprecedented tools at our disposal to innovate. Talk of single person billion dollar companies might be over-egging it but we definitely have access to capabilities that enable us to punch way above our weight.

The downside though is that we MUST punch way above our weight. The only way forward for societies in an AI mediated world is to double down on innovation and invent the world as we want it to be. Otherwise we will have a world imposed on us that we really might not like.