"AI-driven trading losses" spread, causing a collective drop in US real estate service stocks.

With the accelerated penetration of artificial intelligence (AI) technology and the potential risk of disruption faced by multiple industries, U.S. real estate service stocks collectively plummeted on Wednesday. Investors are concerned that the high labor and transaction fee business models of related companies may become "victims" of a new wave of AI impact. By the close of trading, shares of CBRE Group (CBRE.US) and Jones Lang LaSalle (JLL) (JLL.US) both tumbled over 12%, while Cushman & Wakefield (CWK.US) saw nearly a 14% decline. The single-day drops for CBRE and Cushman & Wakefield set new records since the market turmoil triggered by the COVID-19 pandemic in 2020. Analyst Jade Rahmani of Keefe, Bruyette & Woods noted in a report released on Wednesday that investors are accelerating their exit from those business models that are "highly priced, labor-intensive, and considered susceptible to AI disruption." However, she also cautioned that this round of selling may "exaggerate the short-term impact of AI on complex transaction matching businesses," although the long-term impact of AI on the industry remains to be observed. This wave of decline has once again hit the struggling commercial real estate industry. Since the reshaping of office demand due to the pandemic, coupled with the decline in transaction volumes caused by rising interest rates, the industry has struggled to recover. Although the AI boom has brought structural opportunities in some areas, such as data centers and high-end office leasing, the market is beginning to reassess whether AI's progress in automating processes and simplifying transactions will continue to put pressure on traditional intermediary and brokerage businesses. To cope with the industry downturn, companies like CBRE and Jones Lang LaSalle (JLL) have actively expanded their business footprint in recent years, extending into property management, asset evaluation, and cross-industry investment sales, covering hotels, warehouses, apartments, and life science laboratories in an attempt to diversify the cyclical risks of their brokerage business. Rahmani described this selling as part of the latest round of "AI panic trades." Over the past week, shares of software companies, private credit institutions, wealth management companies, and insurance brokers have all experienced rapid outflows, with real estate service stocks becoming the latest sector to be affected. However, some institutions believe that the market reaction is excessive. Barclays analyst Brendan Lynch stated that the sell-off in related stocks seemed "overdone" in the absence of significant negative news on that day. He pointed out that some selling pressure stemmed from market concerns about AI impacting the job market and commercial real estate demand, but these risks "did not emerge overnight and have not fundamentally changed compared to the previous day." The turning point in market sentiment came last week when AI startup company Anthropic released a series of tools aimed at automating legal services, financial research, and other tasks. Nonetheless, several analysts warn that the current intense selling may be more of an emotional reaction, exaggerating the actual risks. Jefferies analyst Joe Dickstein stated that the direct threat of AI to real estate leasing and capital market businesses remains limited. "CBRE and its counterparts have significant advantages in data scale and industry relationships, and as core intermediaries for large leases and transactions, their industry position is unlikely to be shaken in the short term."