REAL ESTATE NEWS

This year, AI adoption has expanded rapidly across industries?but commercial real estate may win the spotlight. The usually tech-adverse industry is going all in on AI. But while the desire may be there, over 60% don?t know how to implement beyond a pilot.

Matthews CEO Kyle Matthews has seen the rate of adoption firsthand, and in many ways, he is showing a way forward. He is bullish on the potential for AI to transform the commercial real estate sector, and his firm has already embraced the technology for a variety of purposes.

Here is how he sees AI transforming the industry in 2026, and why he has an optimistic outlook for investment activity next year.

AI Adoption Happening at Neck-Breaking Pace
AI adoption has hit the industry quickly, and it?s unlikely to slow down any time soon. The industry is still in the experimentation phase, but Matthews predicts that by next year, AI will become a prerequisite.

?We're probably not too far off from AI becoming an invisible backbone that augments and powers a significant portion of what we do both on the?ownership side and the brokerage side,? says Matthews. ?We're probably entering the nice-to-have phase and then at some point in the next 12 to 24 months, we will be in the need-to-have phase.?

Ahead of the curve, Matthews already views AI as a necessary element of routine and daily workflows. The firm is leveraging AI for underwriting, lease abstracts, image and video generation. More recently, they have employed it for data management, including data cleaning and reconciliation. ?We're taking a multi-pronged approach, and we are laying the foundation internally to hypertune models for strategic areas that we hope to dominate in,? he explains.

The Recovery Has Started
AI adoption will likely coincide with a market recovery. Matthews notes the MBA originations index is up year-over-year, meanwhile the 10-year will likely fall below 4% more consistently in 2026. Activity is also healthy in industrial, retail and hospitality as signs that the economy is performing better.

This should help those brokers who persevered, or who are just starting out. ?Professionals really got hurt by the sluggish market over the last 36 months, and it led to some well-established teams maybe hanging up the cleats,? says Matthews. ?There?s a wide-open opportunity for young developing talent in the space.?

More broadly, Matthews notes the industry is improving every year, with 2025 improving over 2024, and 2026 will improve over 2025. ?In these troughs in commercial real estate, there?s never a siren that goes off that says all clear, it?s time to come back and invest,? says Matthews.

For where that investment may come from, he points to institutional money that may finally return to the playing field as sectors show further stability or improve. He expects retail to remain hot and industrial to continue to perform. For multifamily, he notes that while some Sunbelt locations experienced an apartment glut, absorption remains strong and migration patterns suggest a possibility of rent growth starting in the second half of 2026. He?s also bullish on class-A office, as more companies commit to a return-to-office schedule.

?The recovery truly has started,? says Matthews. ?The future is bright.?

For more insights and thought leadership from Matthews, click here.

Source: GlobeSt/ALM