Commercial real estate stocks plunged Thursday as investors fretted over the potential impact of artificial intelligence on office demand, extending a selloff that began Wednesday. The market's anxiety centers on whether AI-driven remote work trends could permanently reduce the need for traditional office space, triggering a broader reassessment of commercial property valuations.

Trading volumes spiked as the selloff accelerated, with office REITs and property management firms seeing the steepest declines. The market reaction suggests investors are increasingly pricing in long-term structural changes to workplace dynamics, rather than viewing current weakness as a temporary post-pandemic blip. Some analysts note that while AI adoption may boost productivity, it could also accelerate the shift away from centralized office locations.

The downturn highlights growing concerns about the commercial real estate sector's vulnerability to technological disruption. Property investors and developers are now grappling with how to adapt their portfolios to an evolving work landscape where AI tools enable more distributed teams. The market's swift response underscores the urgency for real estate companies to demonstrate strategies for navigating this potential transformation in office space utilization.