Newmark was the last of the big brokerages to report earnings this week, and CEO Barry Gosin stuck to the industry script.
Shares of commercial brokerages have whipsawed in recent weeks, even after posting strong earnings, as investors fret that artificial intelligence could eat up advisory fees and automate away certain business lines.
During earnings calls, CEOs took to the microphone with the same message: Artificial intelligence, they said, can’t replace the broker-client relationship. Commercial brokerage is a business built on deep market knowledge, reputation and the art of the negotiation. In fact, AI is good for business because it arms brokers with data more efficiently and at lower cost.
“I see AI as an accelerant for us,” Gosin said Wednesday during the Newmark call. “I believe this is really a gift — that having AI is an enabler for the great talent that we have to do more and to expand more, to give them the tools, the data, the infrastructure to improve their business.”
It’s a familiar frenzy. The internet was supposed to kill brick-and-mortar. Work-from-home was supposed to empty the office. Now AI is coming for the brokers. Is there reason to panic?
“It’s not a real threat,” said Piper Sandler analyst Alex Goldfarb. “[AI] is an efficiency tool that, like any other form of progress, will upend certain areas and allow more growth in others.”
Renting a cookie-cutter apartment? Sure, that can be done online without human interaction. Negotiating a complex commercial lease with terms, concessions, renewal options and rent resets? That’s not a click-and-submit exercise, Goldfarb argued.
AI will eliminate certain jobs, Goldfarb predicted, but brokers will also use it as a tool to move faster on grunt work like lease documentation, floor-plan mockups and client sourcing. The technology will also spawn jobs that we can’t even imagine, he speculated.
“We went from flipping a quarter in a toll booth to E-ZPass, from dumb phones to smartphones,” Goldfarb said. “Every technological advance eliminates certain jobs. But it also creates other jobs.”
Meanwhile, the AI ecosystem — from data centers to digital infrastructure — is driving big revenue for brokerages. And booming AI companies are generating office leasing demand, especially in New York and San Francisco. Those leases are still being negotiated by humans.
AI may be changing the industry, but robots aren’t giving office building tours anytime soon.
What we’re thinking about: After years of seemingly limitless growth, data center capacity under construction dipped at year-end for the first time since 2020, according to CBRE. Power constraints, permitting delays and community pushback are some of the factors delaying data center projects. Is this a temporary blip, or the first sign that the build-at-any-cost phase of the AI infrastructure boom is over? Send thoughts to elizabeth.cryan@therealdeal.com.
A thing we’ve learned: Painting was once an Olympic sport. For the first four decades of competition, the Olympics awarded 151 medals for original painting, sculpture, architecture, literature and music, as long as they were inspired by athletics.
Elsewhere…
— One worker was killed and another was seriously injured after a construction trench collapsed in Bushwick on Thursday morning, according to the New York Post. The two-story building where the accident happened has a DOB permit for foundation work to increase the height, per the Post.
— At their second meeting this year, New York City Mayor Zohran Mamdani and President Trump posed for a photo holding a mock New York Daily News with the headline “New Era of Housing.” In smaller type beneath the headline, the page reads “Trump Delivers 12,000+ Homes; Most Since 1973,” the New York Times reported. A City Hall spokesperson acknowledged to the Times that it was a reference to Sunnyside Yard, the enormous rail yard in Queens over which the city has long dreamed of building 12,000 housing units.
Closing time
Residential: The top residential deal recorded Friday was $18.1 million for 50 West 66th Street, 52W. The Upper West Side condo is 2,800 square feet. Douglas Elliman’s Janice Chang and Timothy Hsu have the listing.
Commercial: The top commercial deal recorded was $156.6 million for 450 Hutchinson Parkway in Throggs Neck, Bronx. The parkland parcel is three-million square feet. Casino operator Bally’s purchased the site with plans to build a gaming facility, hotel and entertainment venue, per reports.
New to the Market: The highest price for a residential property hitting the market was $12.5 million for 535 Park Avenue, Unit 8AB. The Lenox Hill co-op is 3,300 square feet. It last sold on the record in 2019 for $4.5 million. Compass’ Voyage team has the listing.
Breaking Ground: The largest new building permit filed was for a proposed 76,182-square-foot, nine-story, mixed-use building with 95 units at 2501 Fulton Street in Ocean Hill. Gerald Caliendo Architects is the applicant of record.
— Joseph Jungermann