AI Reshapes Office Space Decisions: Executives Face Lease Strategy and Cost Structure Transformation
Artificial intelligence is profoundly impacting corporate office space strategies. A survey of 1,000 CEOs and CFOs in the US and UK, conducted by Censuswide for the International Workplace Group, shows that 60% of respondents believe AI increases the difficulty of predicting office space demand over the next two years, 73% say technological changes reduce their willingness to sign long-term leases, and 99.8% are shifting real estate costs from fixed to variable. Meanwhile, a JLL survey of 2,200 executives across 21 countries finds that only 15% have entered the proactive AI optimization stage, with the majority still in a wait-and-see or analysis phase.
The penetration of artificial intelligence technology into business operations has extended to the often-overlooked field of real estate management. Two recent surveys of corporate executives reveal how AI is changing the planning logic and leasing decisions for office spaces.
Demand forecasting becomes more difficult, willingness to commit to long-term leases declines
A study commissioned by workplace solutions provider International Workplace Group (IWG) and conducted by Censuswidesurveycovered 1,000 corporate executives. The results showed that 60% of respondents said the application of AI has made it more difficult for them to forecast their office space needs over the next two years.
Of all respondents, 73% were CEOs or CFOs of U.S. or U.K. companies. Among them, 73% believe that technological changes, including AI, have made their organizations less willing to commit to long-term leases or adopt traditional real estate solutions.
Notably, nearly all respondents (precisely 99.8%) said they are actively driving a shift in real estate costs from fixed to variable models.
"As rapidly evolving technology changes productivity, workforce planning, and the pace of business operations, leaders are turning to asset-light workspace strategies that can scale with changing demand." — International Workplace Group (IWG)
AI drives remote work and hybrid layouts
Regarding how AI is influencing office space location decisions, a relative majority of surveyed executives believe AI is enabling more remote work. The survey also showed that 57% of respondents are investing in hybrid workspace configurations, 55% plan to locate workplaces closer to where employees live, and 52% are considering decentralized workspace models.
Cost factors are central to location decisions: 99% of executives said cost reduction is one of the driving factors in determining office space location, with 27% ranking it as the most important driver.
"No one knows exactly what their organization will look like in two years, but they know they need the agility to respond to change." — Christian Schmitz, CEO of International Workplace Group
Maturity levels in enterprise AI adoption show clear divergence
Meanwhile, commercial real estate and investment management company JLL releasedanother surveyshowing that among 2,200 C-suite executives and corporate real estate leaders from 21 countries, only 15% of respondents have moved beyond the initial deployment stage and are actively optimizing AI applications in real estate operations.
In terms of maturity distribution, 46% of surveyed leaders said they are actively monitoring AI trends, and 40% are analyzing AI's impact on their real estate functions. However, only 33% said they are actively modeling AI's potential impact on portfolios across locations and asset types.
"This gap reflects the complexity of assessing the impact of a technology still in the early stages of corporate adoption—its impact on the workforce is not yet clear, and most companies remain in evaluation mode." — JLL Research Report
The JLL report further notes that organizations more advanced in AI adoption are not more certain about the future than others. Instead, their advantage lies in having agile planning to bridge the gap between AI's rapid iteration cycles and corporate real estate's long-term commitments.