Thor Equities CEO Joe Sitt Makes Contrarian Case for Office Real Estate Amid AI-Driven Demand Surge

Thor Equities Chairman and CEO Joseph Sitt appeared on CNBC's Money Movers on May 13 to offer a contrarian outlook on office real estate, arguing that investors are broadly misreading the market while outlining the firm's expanding development pipeline in data centers across the United States and Europe.

A Contrarian View on Office Real Estate

Sitt pushed back against prevailing pessimism surrounding office real estate, contending that the market's trajectory depends heavily on which cities are home to technology disruptors rather than those simply being disrupted by them.

"There are markets that are winners and losers. The difference is markets that have the disruptors, not just the disrupted," Sitt said. "The best examples are New York, San Francisco, and Austin. The voracious need for space is incredible."

Sitt identified three converging forces he believes will drive office demand higher. First, he cited surging demand from artificial intelligence and technology firms for premium office space. Second, he pointed to what he described as a coming wave of entrepreneurship among displaced workers — talent he views as now equipped with AI as a productivity multiplier. Third, he highlighted a newly created 35-year tax incentive that eliminates taxes for building owners who convert commercial properties to residential use, which he said is steadily pulling inventory out of the office market just as demand is set to rise.

"I actually see it the exact opposite of everybody else," Sitt said. "I think that within the next six months to a year, you're going to hear people talking about New York City like, 'Where do I get space? I can't get a proper location.'"

Data Center Development Pipeline Spans Multiple Continents

Sitt opened the interview by reflecting on Thor Equities' early conviction in data centers, a strategy the firm began building before artificial intelligence became a mainstream investment theme. He noted that Thor Equities pivoted capital away from office real estate to fund that thesis, and acknowledged the strategy required patience as skeptics questioned the sector.

Thor Equities developed its first data center project in Madrid and remains active in the sector with projects across Texas, Ohio, and Georgia in the United States, as well as locations throughout Europe, according to Sitt.

The firm's broader real estate development pipeline currently exceeds 50 million square feet globally, according to Thor Equities. The company's Latin American division — through which it operates as the largest developer in Mexico — carries a development pipeline of over 20 million square feet. Thor Equities' total property portfolio is valued at $20 billion, the firm said, with assets spanning industrial, laboratory, residential, office, hotel, and mixed-use properties in major cities across North America, Europe, and Latin America, including London, Paris, Madrid, and Milan.

AI's Impact on Real Estate: Opportunity, Not Disruption

Sitt framed artificial intelligence and broader technological disruption as a net creator of economic opportunity, drawing on historical parallels to argue against the notion that AI will reduce demand for commercial space or labor.

He referenced the steam engine and the internet as examples of how efficiency gains from transformative technologies have historically produced more economic activity rather than less, applying that framework to the current AI cycle.

New York City Politics and Business Climate

Sitt also addressed New York City's political outlook during the interview, expressing optimism about the city's future while cautioning against policies he views as unfriendly to business. He pointed to the United Kingdom as an example of what can happen when leadership prioritizes taxation and spending over maintaining a business-friendly environment, and urged New York City's new mayor to avoid a similar path.

The full interview is available on CNBC.com and the Thor Equities YouTube channel.