Artificial Intelligence (AI) is one of many forms of technology that’s found its way into the commercial real estate sector and it could potentially radically transform how industry stakeholders operate and transact, CREXi’s Shanti Ryle recently wrote for WealthManagement.
AI’s impact on CRE could include improving productivity, decreasing operational spending and enhancing industry professionals’ ability to find, research and close deals.
“We’ve already seen transformation,” Ryle said. “AI’s recent advancements are ushering in a new era of technology tools to enhance commercial real estate’s relationship-driven business.”
Ryle identified five key areas where the CRE industry could leverage AI:
As natural language processing ChatGPT and other AI versions have improved, technologies can handle different administrative processes. With AI taking care of those, CRE stakeholders and brokers have more time to focus on their business relationships and tasks that need their expertise. AI-powered tech can collect market and data reports, schedule meetings and property tours and update property listings. Additionally, AI bots continue to sound more natural when communicating with clients, which offers a seamless computer experience and frees up investors’ and brokers’ time.
Data Analysis and Research
AI has the potential to make the research and data collection process even faster. It can provide insights and metrics in almost real-time, compared to the days or weeks it would take analysts to complete. As macroeconomic conditions move faster, it’s critical that stakeholders receive property market information as quickly as possible.
CRE owners can also leverage AI’s forward-looking abilities. The technology can identify and predict trends in specific markets, assisting potential investors and brokers in determining what office space demand might look like in certain cities. The technology can also help industry professionals understand the risk factors that exist in a given area as well as determine potential development sites based on changing demographic information.
More CRE professionals have turned to AI to help generate their marketing materials, according to Ryle. Leaning on tech to create blog posts, listing copy and targeted social media ads is saving team members time and energy, which can be put toward other tasks. While helpful, some experts advise relying solely on AI to create marketing content—some human guidance should be involved.
CRE yields a lot of information. AI can make it easier to sift through; it can pull data from reports faster as well as let individuals know when updated records are due or alert a CRE owner to when tenant demand has increased. AI can also organize, store and locate documents on demand, so CRE owners can make more informed decisions without taking so much time manually searching for the necessary data.
Financial Planning and Organization
AI has also all but eliminated the need for manual calculating. The technology can process figures quickly through a machine that’s absorbed knowledge from prior financial models and results to generate accurate outputs. For example, investors could use AI tools while calculating net operating income and return on investment so they know what investment factors to consider as the contemplate a deal. Meanwhile, CRE underwriters and lenders can use the tech to predict potential returns on specific contracts.
“Commercial real estate is well-poised to take advantage of AI as a vital component in customer service, marketing and analytics, and data management,” Ryle said. “Organizations that embrace the technology wave will likely get a competitive advantage. “Overall, AI tools will enable brokers and stakeholders to streamline processes and focus on what they do best: engage in human relationships and clear a path to generate the highest ROI on commercial investments.”