There is about to be a robot on BlackRock’s real estate investment committee. 

We’re not making a joke about some real estate exec’s emotional capacity — BlackRock is giving artificial intelligence a vote in its investment decision-making.

Global co-Head of Real Estate Paul Tebbit announced the initiative at Bisnow’s London Real Estate Leadership: 2025 Forecast last week, highlighting AI’s ability to detect patterns in previous investments and spot risks. 

“The type of questions and the dispassionate nature of AI could be a useful kind of almost sounding board for other investment committee members, seeing what it would come up with independently,” Tebbit said.

The move follows similar AI adoption in investment decision-making, such as Abu Dhabi’s Mubadala Investment Co. integrating AI into its committee at the beginning of this year. 

CRE is still figuring out just how best to leverage AI. JLL is about 18 months into using its in-house generative tool, JLL GPT, and is now using it to predict what investors would be interested in particular buildings and what buildings particular investors should target. 

Retail landlords are using data on where shoppers park, what path they take and where they spend money to inform how they lay out their stores. Architects can have a computer churn out multiple variations of a design in seconds.

And major multifamily landlords including Brookfield and Equity Residential are using AI to handle unpaid rent collections. 

“They knew every month they had to do it, they got people fighting them on the phone, fighting them in the office, calling in with sob stories on why they couldn’t pay rent, and that introduces a lot of human bias in those conversations,” said EliseAI’s Jacob Kosior, whose platform can automatically nudge delinquent tenants to pay their rent and can draft eviction notices. “Now we’re able to remove that bias entirely with AI.” 

It’s still the Wild West out there, but with three-quarters of CRE companies ramping up their AI use, more use cases are coming out on the regular. Are you using AI in an unexpected or super cool way? Tell us about it: firstdraft@bisnow.com. 

— Catie Dixon, Mark F. Bonner, Jay Rickey and Kayla Carmicheal

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On Our Radar

• America added over 3 million people last year — its fastest growth this century. However, that pace will drop sharply as Trump's immigration policies take effect. S&P Global projects population growth will slow to 0.4% annually, the lowest since the 1950s. With fewer workers entering the economy, S&P warns productivity gains alone won’t offset the impact. Given Biden couldn’t hit 3% GDP growth with record immigration, Trump's target will be even harder to achieve. Recognizing that decline, Jamestown CEO Matt Bronfman told us last week that the Sun Belt is the safest global CRE bet, and “if you’re a professional real estate investor, you should be a part-time demographer as well, because demographics are destiny in real estate.”

• U.S. apartment market weakens amid a supply surge and higher rates. The NMHC's latest survey shows worsening apartment market conditions, with all indexes below the 50 breakeven point: market tightness (40), sales volume (41), equity financing (48) and debt financing (32). Last year saw the most apartments delivered since 1974, which is pressuring rents and occupancy — especially in the Sun Belt. Meanwhile, the Fed has signaled only two rate cuts in 2025, pushing the 10-year Treasury yield up 58 basis points since October.

• Fitness led Q4 retail growth, but overall visits stayed flat. Retail foot traffic was stagnant last quarter, with 0% overall growth YOY, according to Placer.ai’s Quarterly Retail Review. U.S. retail closures were up 70% in 2024. Fitness saw the biggest surge, up 4.1%, led by EoS Fitness (up 22.1%). Discount and dollar stores followed (up 2%), with Five Below (up 9.3%) as the top performer. Apparel grew 1.8%, driven by Savers Thrift Stores (up 9.8%). Grocery visits increased 0.9%, with Aldi (up 12.3%) leading. Superstores rose slightly (0.1%), with BJ’s Wholesale Club (up 4.3%) on top. Home improvement and furnishings declined 0.1%, though Harbor Freight Tools (up 9.4%) bucked the trend.

Today’s Deep Dive: More Retailers Are Snapping Up Buildings And Taking On An Unfamiliar Role: Landlord

Last year, Avi Hiaeve scooped up the former Playboy Club in Midtown Manhattan out of foreclosure, with plans to turn the building into the headquarters for his luxury jewelry company, Avi & Co.

His acquisition was part of a string of purchases by tenants-turned-owner-occupiers as retail rents picked up alongside a supply of investment deals. Now, some of those retailers are navigating their way into the new position of becoming a landlord.

“Given the current value and demand for retail space in the area, we’ve decided to lease out the highly sought after premier ground and second floor spaces to other luxury retailers,” Hiaeve said in a statement. 

At least 14 major real estate purchases by retailers occurred in NYC in 2023 and 2024. Most of the acquisition targets were in Manhattan’s prime shopping corridors, including Fifth Avenue, Madison Avenue and SoHo. 

The trend has come as retail rents have skyrocketed while office values plummet — and it is expected to continue as long as those factors do.  

Read the full story here.

This Morning’s News

DATA CENTERS — OpenAI, SoftBank, Oracle Launch $500B Infrastructure JV (Bisnow): The heads of OpenAI, SoftBank and Oracle were joined by the President at the White House Tuesday to unveil the private investment. Known as Stargate, the JV will commit an initial $100B to build the required infrastructure for the rise of AI. First up: A Texas data center venture. Read more here.

ARCHITECTURE — Trump Revives Architecture Order For Federal Buildings (Art News and The White House): One of Trump’s new executive orders reinstates the preference for classical architecture in federal buildings, echoing a 2020 mandate. Read more here and here.

POLITICS — CEOs Brace For Trump’s EO Barrage (WSJ): Corporate leaders have established teams to navigate rapid regulatory shifts under Trump’s wave of executive actions. Read more here.

INDUSTRIAL — Brookfield Lists 1.8M SF Warehouse Portfolio (Green Street): The firm is marketing a five-market industrial portfolio that could fetch $330M. Over half the assets are in Atlanta and Dallas. Brookfield has invested nearly $15M into the properties. Read more here.

SFR — FTC Eyes Probe Of Large Single-Family Rental Owners (Bisnow): Former FTC Chair Lina Khan had been spearheading the federal government’s crackdown on AI price-fixing for housing, hidden rental fees and price gouging. The FTC issued a request for comment last week, seeking the public’s take on how to probe SFR owner-operator impacts on the housing market. Read more here.

DATA CENTERS — South Carolina Revives Massive Nuclear Project (WSJ): South Carolina's big power provider has tapped financial advisers to restart construction on its nuclear reactors. The utility is working with bankers at Centerview Partners. Read more here.

OFFICE — Axon Weighs Arizona HQ Exit After $1.3B Expansion Challenges (TRD): The Scottsdale-based taser and body camera maker is considering relocating out of Arizona over pushback on its $1.3B HQ plan, which includes a 435-room hotel and 1,895 homes. The company has an existing footprint in Boston, Seattle and Washington, D.C. Read more here.

RETAIL — Gen Z Fuels Mall Revival (BI): Vacancy rates are the lowest in 20 years. Visits and sales have been climbing for three years. In a 2023 survey by ICSC, 60% of Gen Zers said they visit malls just to socialize. Read more here.

CONSTRUCTION — 5 Ways Trump Can Boost Construction Industry (Construction Dive): Chip away at workforce shortages, avoid tariffs and accelerate permitting are three of the recommendations from the Associated General Contractors of America to support construction growth. Read more here.

HOUSING — Renters Need $63K To Afford Typical Apartment (Redfin): The typical renter earns enough to afford the median rent in 15 of the 44 major metros Redfin analyzed. Austin, Houston and Dallas are the most affordable for renters, while Providence, Miami and New York are the least affordable. Read more here.

DEVELOPMENT — Adam Neumann's Flow Pays $70.5M For Miami Site (Bisnow): The former WeWork CEO has acquired a 16-acre Miami-area development site at auction that had been tied to alleged EB-5 investment fraud scheme. Read more here.

AI — CRE Must Ask The Right Questions To Unlock Data’s Potential (McKinsey): Better analytics can drive efficiency and solve real estate industry challenges, according to McKinsey. "The real innovation today is not a particular single information feed; it’s the ability to bring data together in one place," said associate partner Jules Barker. Read more here.

MULTIFAMILY — Philadelphia Expands Legal Aid To Curb Evictions (Bisnow): Philly is expanding a right-to-counsel program to help low-income tenants facing eviction. The initiative offers free legal representation to tenants making 200% or less of the federal poverty level and has spread to three more zip codes in North Philly and the Northeast. Read more here.

PEOPLE — Sunstone Hotel Investors Eliminates COO Role (SEC): The responsibilities previously performed by Chief Operating Officer Chris Ostapovicz will be assumed by the company’s president and chief Investment officer as well as other members of the REIT’s executive team. Read more here.

FINANCE — TD Bank To Sell $9B In Mortgages (BNN Bloomberg): Bids on the portfolio, which consists of jumbo mortgages held by U.S. homeowners with good credit scores, are due next week. Read more here.

INDUSTRIAL — SkyREM Secures $170M Refi On 2.5M SF Portfolio (SkyREM): The properties were 99% leased to 15 tenants. The portfolio is spread across South Carolina, North Carolina, New Jersey, Wisconsin, Georgia, Iowa and Pennsylvania. Read more here.

ECONOMY — U.S. IPO Market Gains Postelection Steam (Seeking Alpha): "Deals are now getting on the road, they’re making plans to IPO either in the coming days and weeks or in quarters or second half of the year," New York Stock Exchange President Lynn Martin said Wednesday. Read more here.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at firstdraft@bisnow.com.