What Real Estate Gets Wrong About AI

• Wrong about AI: For AI to be adopted by the real estate industry, companies need to understand that it requires a fundamental transformation about how decisions are made.

• Drama on the Hudson: A billionaire investor is fighting with institutional landlords as they push back against her bid to take over Hudson Bay’s leases for her new retail concept.

• Brutal takedown: President Trump’s executive order to “make federal architecture beautiful again” could impact certain government-heavy office markets.

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Perspectives

What Real Estate Gets Wrong About AI

The commercial real estate industry is awash in data, but clarity remains elusive. Everyone wants to claim they’re deploying artificial intelligence, yet most efforts amount to dressing up spreadsheets with a shinier interface. What’s missing isn’t more dashboards, it’s a disciplined approach.

Real AI isn’t a plug-in or a buzzword. It’s about unifying fragmented systems, adding context to raw data, and building operations that can think in real time. The firms that get this right aren’t just automating tasks, they’re reshaping how decisions are made and how performance compounds.

The real test is outcomes. Faster collections, reduced risks, smarter maintenance—these are the marks of AI done well. The next step goes even further: moving from automation to anticipation, where properties don’t just react but predict. And that’s where the future of real estate lies.

Overheard

Government Taste Shift Could Reshape Certain Office Markets

President Trump’s new executive order mandating classical and traditional architectural styles for federal buildings signals more than an aesthetic preference—it could reshape the office real estate market in and around D.C. and other government-centric corridors. The GSA is now instructed to steer new federal projects toward neoclassical, Gothic, or Renaissance-inspired designs and steer away from modernist or brutalist styles. That has implications not just for new builds, but for how landlords and developers reimagine their existing portfolios.

One immediate effect could be reduced demand for modernist structures in prime civic zones. Buildings that currently lean toward glass-and-concrete minimalism risk being out of sync with federal taste. This may encourage a wave of sympathetic renovations for older assets to align with this classic aesthetic. If government tenants start preferring landlord-owned buildings that reflect this heritage reuse, modernist stock may lose appeal. Regional markets like Charleston or Santa Fe may also benefit from revivals in traditional materials and design firms.

Longer term, office markets in D.C., Virginia, and adjacent hotspots may see two divergent paths: some landlords could lean into classical upgrades, leveraging limestone facades or marble entries to attract federal tenants. Others may offload modernist properties for conversion to housing or adaptive reuse. If government divestment accelerates, as earlier DOGE-driven lease terminations suggest, the new Federal order might shake up how many office markets look and feel.

When Bold Retail Comebacks Collide with Institutional Real Estate Caution

Ruby Liu, a British Columbia-based real estate billionaire, is waging a legal battle against Canada’s major pension-backed landlords (Oxford Properties, Cadillac Fairview, Ivanhoé Cambridge, and others) over her proposed takeover of two dozen former Hudson’s Bay anchor store leases. She envisions bringing back department stores under her own name, complete with dining, entertainment, and family attractions, all within a six-month timeline backed by a $325 million pledge. Landlords, however, are warning that this ambitious revival plan “defies commercial common sense,” arguing that Liu lacks financial transparency, operational expertise, and credible proof of funding.

The stakes go beyond one woman’s dream. These leases anchor prime regional malls, and landlords argue that repurposing them with an untested, in-house concept could undermine tenant mix, erode foot traffic, and ignite a “negative halo effect.” Oxford’s vice president warned that a poor-performing anchor could “permanently undermine ... the commercial viability” of entire mall wings, while others questioned Liu’s tight timelines, minimal renovation budget, and lack of existing supplier relationships.

For retail real estate at large, this fight could become a signal. Liu’s battle may well redraw the boundaries of what kind of retail revival strategies are considered viable. Many landlords remain cautious about legacy retail formats already under pressure from e-commerce and demographic shifts. If she is able to spark a mall revival as she hopes, she could change the way that landlords think about investing in new concepts.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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