Norm Miller authors article entitled, "Betting on AI and real estate in a shifting economy"

Dr. Norm Miller, emeritus professor at the University of San Diego recently authored a featured article for The Property Chronicle titled “Betting on AI and real estate in a shifting economy: Why it is a platform for resilience and reinvention.” In this timely piece, Dr. Miller explores how the convergence of artificial intelligence and real estate is reshaping the industry’s future, offering a thoughtful perspective on innovation, adaptability, and long-term opportunity. His contribution not only highlights emerging trends but also reinforces USD’s leadership in advancing critical dialogue within the global real estate community. Dr. Miller’s article is below.

Betting on AI and real estate in a shifting economy. Why it is a platform for resilience and reinvention.

It’s remarkable – nearly half of all US spending now flows into technology, with artificial intelligence leading the charge across virtually every industry. AI investment has eclipsed traditional consumption, as both startups and incumbents scramble for market share. Yet, the aggregate return on this tidal wave of capital is low – because most players won’t survive.

Just as the dot-com bubble of the late 1990s left office buildings vacant in San Francisco and beyond, we’re likely to see a similar shakeout. Herd behavior persists, and history rhymes. A few winners will emerge, while the rest fade. Think business-share dodgeball – except that antitrust regulators usually halt the game before it’s winner-take-all.

Will AI take your job?

That fear isn’t new. The Luddites worried about looms. Farmers fretted over tractors. Typists, miners, and factory workers were displaced – but they adapted.

We’ve proven remarkably inventive at creating new roles: Uber drivers, pet walkers, yoga instructors, social media influencers, personal chefs, life coaches. Expect another wave of jobs next year that don’t yet exist – because the need hasn’t arrived yet.

Still, adaptation isn’t automatic. Your job isn’t guaranteed. Upskilling is essential. Learn to use AI tools. Master social media for marketing. In real estate, PropTech is no longer a buzzword – it’s a necessity. From valuations and leasing to energy management and investor reporting, AI is streamlining operations and boosting returns.

Conferences and platforms like Realcomm, CRETech, and the PropTech Connection are no longer optional – they’re your new classroom.

“Real estate is quietly benefiting from the tech boom.”

Economic forecasting: A game of whack-a-mole

Meanwhile, the macro landscape is chaotic. Tariffs, shutdowns, countermeasures, and executive proclamations have rendered traditional forecasting models nearly useless.

Economists are playing whack-a-mole on model assumptions. And many long-held truths are unraveling:

• Federal agency tenants were once the safest bet – always paying rent, never downsizing.

• Federal jobs were synonymous with stability.

• FEMA and NFIP were assumed to mitigate climate risk.

• Mortgage defaults were seen as unrelated to climate.

• Free trade was a growth engine.

• Immigrant labor filled low-skill jobs and kept costs down.

• University research drove innovation and startups.

• Low interest rates helped justify deficit spending.

• Crypto was for unstable economies – not strategic reserves.

• The US dollar was the world’s anchor.

In 2025, the dollar’s strength masked tariff pain thanks to pre-tariff inventory stockpiling and price concessions from Asian exporters. That cushion is now gone.

Consumer confidence is slipping. The dollar is weakening.

 And 2026 may bring:

• The lowest immigration levels in decades

• Fewer foreign scholars

• A slowdown in scientific innovation

• A modest recession and stock market correction are likely — except for a few tech outliers.

Real estate: A defensive play with upside

Where are the bright spots?

1. Asset reallocation

A stock market pullback will redirect capital toward long-lived assets like gold (already surging) and real estate. This should stabilize or lower cap rates.

2. Tax policy

Lower rates and restored SALT deductions soften recessionary impacts. Faster depreciation write-offs boost the present value of new projects and AI infrastructure.

3. Data centers

Overbuilt? Perhaps — but demand will catch up. Our digital footprints are expanding exponentially.

4. Biotech & life sciences

Overbuilt in some markets and vulnerable to declining university research funding. A policy shift once the CDC follows science again could reignite this sector if you can hold for three+ years.

5. Multifamily

Stabilizing, with some markets showing rent softness due to oversupply — proof that algorithms aren’t artificially propping up rents.

6. Self-storage

Soft now, but poised to benefit from recession-driven housing churn within a year.

7. Single-family rentals

Institutional buyers are thriving, remotely managing lower-tier housing and leveraging tax advantages unavailable to middle-income households who receive no benefit from itemizing mortgage interest and property taxes.

8. Industrial

Still strong, driven by e-commerce and post-COVID supply chains, even with expected softening at import ports.

9. Retail

Evolving into experiential services — yoga, massage, pet spas — things Amazon cannot deliver.

 Final thought

Place your bets — but make sure some of those bets are in real estate.

It’s not just a hedge; it’s a platform for resilience and reinvention. We provide an essential input into the future — whether for AI startups or goat yoga.

See our new free commercial real estate resource at www.crebook.net, with 330 educational files and spreadsheets.

Norm Miller is an emeritus professor at the University of San Diego, vice president of the Hoyt Institute, consultant, and board member of several organizations. Contact: nmiller@sandiego.edu