The impact of artificial intelligence on employment could have a knock-on effect on the multifamily sector of the real estate market, given its reliance on demand from young workers, according to analysts from Morgan Stanley.
In a note, the analysts including Adam Kramer flagged a host of researchers who have argued that there have been "clear negative" effects on recent graduates and younger cohorts from AI, while other publications have suggested that unemployment rates have been creeping up for these workers whether they are exposed to the nascent technology or not.
In particular, they cited internal data which suggested that the amount of job postings that do not mention a need for years of experience -- and would, subsequently, be more skewed toward junior roles -- has fallen from around 67% to 55% since the third quarter of 2023.
Crucially, they also argued that that many of these postings were in employment sectors which are common among many types of apartment renters. Data from job market data provider LinkUp, in particular, has shown that postings for roles in key employment sectors of high-end and mid-range apartment renters have declined in recent years, although this has been "in line with broader trends," the analysts added.
Healthcare, technology, finance, education and government are among some of the largest tenant employment sectors in the United States, with healthcare in particular ranking as either the first or second most common segment in each of the country’s top markets, the analysts said.
This could have an impact on real estate investment trusts, or companies that own, operate, or finance income-producing properties, often by pooling togethering funds from individual investors to build a portfolio of these offerings, the analysts said.
"It’s a cohort with much overlap with apartment REIT tenants," they wrote.
Source :
https://www.investing.com/news/stock-market-news/how-will-aidriven-shifts-in-employment-affect-apartment-reit-tenants-4268982
