AI is on the march and CRE investors everywhere best beware. White Collar layoffs are a comin’ and there’s no place to hide.
Quoting Wednesday, October 29, 2025, WSJ, “The nation’s largest employers have a message for office workers: Help not wanted.”
Amazon recently announced it is laying off 14,000 employees with the intention of ultimately eliminating as much as 10% of its white-collar work force.
This is not an isolated incident, UPS announced recently it had reduced its management workforce by about 14,000 over the past 22 months.
Target has announced it will eliminate 1800 managerial positions.
The hollowing out of America’s managerial workforce has begun. C-Suite executives are hoping to do more with less in the way of well compensated white collar workers.
We believe this will have a greater effect on commercial real estate valuations than anything else in our lifetime. It will effect how and where people live and what they buy.
The AI ripple out could be more consequential than remote work and Amazon combined.
How then, do commercial real estate investors go about striving to make their portfolios more AI resilient?
As mentioned in previous blogs, a ‘heads and beads’ strategy may be a good place to start.
No matter what the pace of technological change, people still need a place to lay their head: in school, creating a family, or in retirement.
Therefore, student housing, multifamily and senior living all still enjoy currency from a demand standpoint that Amazon and AI may have a difficult time disrupting.
This is not to say that demand for habitational assets such as these will not wax and wain. Supply and demand, location and myriad other externalities will always impact their pricing and profitability. However, it is our guess that it will be surpassingly difficult for technology to displace them entirely.
There are also niche property types that come to mind like fueling station/convenience stores.
Now that the Biden war on fossil fuels is over, and consumer demand for EVs is waning in the absence of government subsidy, these properties could be around for a long time.
Historically, they have also proven very recession resistant.
This is in large part due to the necessity nature of the products they sell; fuel, food, tobacco products, and beer.
At the end of a long day, a working man is going to fill up his rig, buy a rack of beer, get some food and probably some chew.
Another big benefit of these properties is their accelerated depreciation schedule of 15 years. The 2017 Trump tax bill provided for this, and the “Big Beautiful Bill’ extended it.
This allows investors to shelter the lion’s share of a DST’s income from state and federal taxes.
Finally, this is a very fragmented industry. The majority of the 60,000 + fueling station/convenience store properties are owned by mom and pops.
The aging of the population may force consolidation from an ownership standpoint.
As local owner/operators become regionals and regionals become national, credit quality has the potential to improve, possibly increasing the assets value.
These are just a few property types available in the DST space which may go a long way to making your commercial real estate portfolio more Amazon and AI resilient.
We hope this helps.
