"Will AI Replace Brokers?"... US Real Estate Service Firms' Stocks Plunge as 'AI Scare' Spreads

As artificial intelligence (AI) technology advances, concerns are growing that traditional, human-centric business models will collapse. Recently, this 'AI Scare Trade' has struck beyond the software industry and into the commercial real estate services market, causing the stock prices of related companies to experience record-breaking plunges.

◇ Stocks of Major Companies Like CBRE and JLL Record Largest Drops Since Pandemic

On the 11th (local time), the stock price of CBRE Group, the world's largest commercial real estate services firm, plunged nearly 15% at one point during intraday trading, while Jones Lang LaSalle (JLL) and Cushman & Wakefield also recorded declines in the 12-15% range.

This sudden drop in stock prices is the largest decline since March 2020, when the market collapsed due to the COVID-19 pandemic. Market analysts believe that this sell-off is not merely a temporary correction, but a reflection of a structural crisis in business models driven by the advancement of AI technology.

◇ "High-Cost Personnel Structure in Crisis Before AI"... Accelerating Investor Exodus

Investors are concerned that real estate brokerage and service models, which have high fees and heavy reliance on human resources, will become direct targets of AI technology. Keefe, Bruyette & Woods (KBW) analyst Jade Rahmani analyzed, "Investors are withdrawing funds as they perceive labor-intensive, high-fee business models to be vulnerable areas to AI-driven innovation."

In particular, this fear has spread further recently as AI startup Anthropic unveiled its 'Claude cowork' feature, which allows multiple autonomous AI agents to collaborate and perform complex tasks. The market believes that AI will be able to replace humans by automating data processing tasks traditionally performed by brokers, such as real estate market research, lease analysis, and comparative market analysis, in addition to legal services and financial research.

◇ 'Capital Shift Toward Efficiency'... Selling Services, Buying Infrastructure

This stock price plunge is interpreted as part of a so-called 'Efficiency Rotation.' Investors are selling shares of service companies that rely on human labor, and instead moving their capital into physical infrastructure assets essential for powering AI, such as power (utilities), copper, and semiconductors.

The industry points out that as the perception spreads that AI agents can replace the work of junior brokers, a revaluation is underway for companies that used to generate revenue in proportion to their headcount.

◇ "Excessive Fear" vs "The Beginning of Structural Change"

Some point out that the market's reaction is excessive. Analysts at Jefferies and Barclays diagnosed the current stock price decline as a 'knee-jerk overreaction,' stating that the vast amount of data accumulated by large firms like CBRE and their ability to close complex deals are difficult for AI to replace in the short term. In fact, these companies have mitigated risks by diversifying their businesses beyond simple brokerage into asset management, project management, and more.

However, despite this defensive logic, uncertainty about the long-term disruptive power of AI continues to weigh on the market. Analyst Rahmani added, "While the immediate risk to complex transactions may be overstated, the long-term impact of AI on the industry is still in a 'wait-and-see' phase."

Meanwhile, ironically, separate from the declining stock prices of real estate service companies, the adoption of AI technology within the real estate market itself is expected to grow explosively. According to related reports, the global real estate AI market size is projected to grow from $404.9 billion in 2026 to $1.303 trillion by 2035. This suggests that while the adoption of technology will accelerate, it remains unclear whether the fruits of this growth will go to the traditional, human-centric service firms.