In its latest sector outlook, PIMCO addresses how real estate can stay relevant in the age of AI. The manager emphasizes a key consideration for any asset: its capacity to host "the tenants of the future." The white paper, titled Real Estate: From Repricing to Relevance, explores the sector's fight for relevance as artificial intelligence reshapes economic demand.

"You need to own real estate which is – and will stay – useful in the economy it is in," said François Trausch, chief executive of PIMCO Prime Real Estate. He spoke to PERE ahead of the release published today. Trausch argues that properties must adapt to serve evolving tenant needs driven by technological advancement.

The outlook signals a strategic shift from cyclical repricing concerns to structural relevance questions. PIMCO suggests that assets unable to accommodate AI-era businesses risk obsolescence, regardless of current valuation metrics. This framework reframes investment analysis around long-term utility rather than near-term price adjustments.