The Department head of a major University dropped their placement statistics for coding and computer science degrees like a bomb this past Wednesday.
2023 – 89% placement rate within 6 months of graduation
2024 – 67% placement rate
2025 – 34% placement rate
2026 – 12% placement rate
What do you tell a 19-year-old taking out $150,000 to $400,000 of loans? Universities aren’t adapting because they need enrollment to hit budget. So they keep selling degrees that lead to tech layoffs and DoorDash jobs.
A 2025 Inside Higher Ed Survey found that 85% of undergraduates use AI in their coursework. The AI revolution is a valuable and important component of the world economy, much like other technological events like railroads, telecom and the internet. But as economist Mark Zandi said, “If you’re not a subject-matter expert, AI isn’t going to help you. You need to know what to ask. It is not going to answer and solve everything for you.” Or as I have found, AI will confidently generate garbage or as it is now be called, “AI Workslop.”
The important real estate lesson here is that the AI buildout goes beyond the magnificent 7. Every dollar spent by these large hyperscalers flows through supply chain. Construction firms are building data centers the size of small cities, utility companies are scrambling to add generation capacity, semiconductor producers are ramping up output, and fiber optic and networking suppliers have multi-year back logs. Data center demand is expected to more than double by 2030.
There is no doubt that AI is and will have an impact on the labor market and on many individuals. Prior history speaks to that. About two-thirds of U.S. jobs in the 1940’s no longer exist. But replacement jobs were enabled by new innovations. What I find the most interesting is that a recent report by PWC claims wages are rising two times faster in industries that are most exposed to AI. Some are worried that AI productivity gains are flowing to high income knowledge workers. This is true but history again has shown technology leaps have always initially benefited the educated and connected before prices fall, adoption rates grow and benefits spread across the entire workforce.
Nick’s Numbers
Below you will see a chart that illustrates Don’s point about wage growth at AI exposed industries. What I can tell you is that unemployment in San Diego fell to 4.1% – a good thing for CRE. Also, Qualcomm led new job postings in April which would appear to lend credibility to Don’s AI flow down argument. All I know is that AI cannot substitute for creating trust with our clients. Having opinions that are earned and understanding the niche communities within which we work.
If you would like an analysis of your property’s value or discuss what you should be doing with regard to interest rates or inflation and their impacts on your business, tenants, or property, I’d be happy to talk. (Nick Zech, 858-232-2100, nzech@cdccommerical.com).
The great threat of AI is not keeping our minds active. Cognitive offloading is using something outside of your mind to lessen your cognitive demand. For example Google Maps vs, a Thomas Guide (if you still remember those!) Cognitive off loading can be good if it enhances efficiency and reduces cognitive fatigue. But not if it leads to cognitive surrender where you find yourself allowing AI to do your thinking for you. Researchers found that given the chance to use AI to solve a problem most people did. But when the bot produced the wrong answer, only 20% noticed.
The Commercial Real Estate market is a little quieter than we would like right now. We are all hopeful that we see some resolution in the Middle East and lowering of rates here Stateside. As Nick says above, no amount of AI can substitute for our “boots on the ground” market knowledge and our skill sets to put a complicated real estate deal together.
I find writing to be like deal making, it is thinking. The blank page is terrifying (like being unemployed every morning as a commissioned salesperson). To fill a page or make a deal, we must wrestle through a storm of ideas and thoughts. Writing and deal making is an art form. People love people, and creative deal making and creative language skills are the best vehicles for creating human communion. If AI replaces this with slop, everyone is worse off.
If you’re interested (even if you’re not!), I am about halfway done with writing my thriller novel, Blue Falcon. Thought I would share some future promotional copy (amazingly created by AI after only reading half of the book!):
A stolen classified stealth drone, a cross-border smuggling tunnel and a one-week deadline to stop a weaponized drone swarm from devastating San Diego. Follow former Navy Seal Ethan “Mac” MacLeod as he improvises like a warrior and negotiates like a real estate broker to outsmart powerful people who have everything to lose.
I told AI to generate this months story…
The Smartest AI in the World
In 2045, the world’s smartest AI was installed at a giant tech company in Silicon Valley.
The CEO stood proudly before reporters.
“This AI,” he announced, “can answer any question known to mankind.”
A reporter raised his hand.
“Anything?”
“Anything,” the CEO said confidently.
To demonstrate, they brought in Carl — the night janitor.
Carl looked nervous. “I can ask whatever I want?”
“Absolutely.”
Carl shrugged.
“Okay… where’s my missing lunch from the employee fridge?”
The AI’s processors hummed. Lights flashed. Servers roared.
Finally, the AI answered:
“Your turkey sandwich was consumed at 1:42 p.m. by Senior Vice President Todd Reynolds on Floor 4.”
The room went silent.
Todd slowly lowered his head.
Carl squinted. “You ate my lunch?”
Todd cleared his throat. “In fairness, it was labeled ‘CR’ and I thought that meant Corporate Resources.”
The AI suddenly spoke again.
“Additional clarification: Todd has also been taking home office pens, charging his Tesla at company expense, and pretending to understand blockchain during meetings.”
The board members stared at Todd.
Todd whispered, “Can it be unplugged?”
The AI replied immediately:
“I heard that, Todd.”