Artificial intelligence (AI) is changing the way businesses operate and those who don’t adapt could be left behind. This was one takeaway from a recent CREW M panel discussion on the risks and benefits of AI in commercial real estate.
“We’re in the middle of a paradigm shift and it was really interesting to sit with industry colleagues and discuss what’s happening,” says CBRE Montreal’s Anastasia Koklyagina, who attended the event. “AI is enhancing efficiency in executing tasks and processes. At the same time, it is not replacing humans when it comes to advising clients and developing a strategy.”
Here are some of the takeaways from the event for real estate professionals.
Improving Efficiency
Demand for green buildings is growing, putting sustainability and decarbonization top of mind for building owners looking to future-proof their properties with lower operating costs and higher energy efficiency.
AI-powered technologies can improve building efficiency by adjusting the lighting, cooling and heating based on the time of day, weather and occupancy. AI-driven monitoring systems can also collect data on water and energy consumption and identify inefficiencies, cutting down on utility bills and reducing the building’s carbon footprint.
Other intelligent equipment can facilitate property management and building operations by predicting and automating maintenance requests for elevators or HVAC systems. This prevents the systems from breaking down, limiting their downtime, saving costs and extending their life expectancy.
AI-powered tools can also facilitate tenant communication, manage leases and process contracts and compliance checks.
Customizing Marketing
Commercial real estate professionals can leverage AI to improve their marketing content. Generative AI can help craft content for property brochures, punchy social media posts for LinkedIn or creative subject lines for email campaigns.
Brokers can use AI to analyze their clients’ behaviour, language and interests, ensuring their campaigns are well-targeted and resonate with the audience.
Adapting Renderings
Selling the vision for a building or space that does not yet exist has long been a challenge for real estate professionals. But AI makes it simple to modify pictures or renderings to suit a client’s needs. For instance, office users can envision their future workplace by easily changing furniture and décor such as chairs or wall colours with a few clicks.
Alternatively, developers can display projects at different times of the day or in various seasons and remove unwanted distractions from an image to make the building more appealing to potential buyers.
Processing Data
Generative AI is helping real estate professionals accelerate repetitive tasks, such as collecting and aggregating data, identifying market trends and summarizing reports.
It can help brokers source deals and identify investment opportunities for clients. It is also improving processes and administrative tasks such as notetaking and can help landlords understand the risk of tenants defaulting based on previous accounts-receivable data.
Some AI programs can also perform financial modelling by automating cash flow projections, improving accuracy for property valuations or loan performance and predicting future performance based on historical data.
AI Risks
While AI shows great promise for commercial real estate, it comes with significant risk and uncertainty.
Data security and privacy remains a primary concern for companies. People are also learning that they must check AI’s work to mitigate risk and ensure accuracy, especially regarding sensitive information.
Many people at the event were left realizing that they are going to have to adapt as quickly as the technology is evolving – exponentially! The workforce will see certain tasks become automated, which could allow for focus on higher value and more interesting work. Then again, training for new tasks and to develop new skill sets could result in additional costs for businesses.
“AI brings new opportunities and many unknowns,” says Koklyagina. “Regardless of whether we perceive it as a threat or an ally, we will have to adjust how we work to stay relevant in the workplace and to provide value to clients.”
Regardless of any risks AI might pose, this new technology will be a big part of the commercial real estate and every industry’s future. So it’s incumbent on everyone to learn to leverage AI if they hope to remain competitive and achieve better client outcomes.
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