WE MODEL 4 UNIQUE SCENARIOS
AI Adoption & Productivity
CRE Implications (High Level)
Scenario
Probability
Macro Backdrop
Labour Market
Faster growth; oil prices fall quickly as Middle East risks fade
Broad demand growth across sectors; strong rent growth and rising values
S1: Productivity-Led Expansion
Rapid AI adoption; strong productivity gains
AI largely augments labour; solid job creation
15%
Demand holds up in the near-term but sector differences emerge as AI is more widely adopted
Steady AI adoption; moderate productivity gains
GDP growth holds steady above 2% with inflation falling back below 3%
Long-run job growth remains steady after near- term dip and recovery
S2: C&W Baseline – Gradual Adoption
50%
Tighter access to credit and slow global growth triggers a short, sharp recession in 2027
Aggregate employment declines in 2027 with the unemployment rate peaking near 6%
Cyclical slowdown in demand; higher vacancy and rent pressure, followed by recovery
AI fails to meet near-term expectations; delayed productivity
S3: AI Bust – Recession
25%
Rapid AI adoption and productivity at the expense of labour substitution
Labour market headwinds are more than offset by productivity, raising GDP growth above baseline.
Structural job losses; prolonged higher unemployment
Soft demand; downside pressure on rents and values
S4: Displacement
5%
Cushman & Wakefield
Powered by FlippingBook