Concentrating on the negative substitution effects of artificial intelligence (AI) on real estate overlooks the positive “income effect” that AI could have on economies and property demand in the future.

The admonition comes in a blog post published in late August by Jim Costello, chief economist at MSCI Real Assets, in which he writes that linear thinking over AI is blinding people to the new opportunities it could create for real estate investors.

“Hype over the negative impact of AI on commercial real estate is on the rise,” writes Costello. “To hear some commentary, we should be welcoming our new robot overlords in the hopes that they will deign to give us menial jobs since all knowledge-driven activity will be replaced by machines. Forget about debates over the return to office — such a worst-case scenario caused by AI could be far more devastating to office demand.”

He argues, however, that there are other, “more hopeful views” on the fut