AI is transforming commercial real estate (CRE), but many professionals are still in the early stages of understanding how to fully leverage its capabilities. In a recent CREW Network webinar, moderated by LightBox as part of its role as the 2024 Technology and Data Program Partner, industry leaders explored AI’s potential and challenges. Speakers Salumeh Companieh, Chief Digital and Information Officer at Cushman & Wakefield, and Katherine Huh, Director at PwC, shared insights on early AI adoption trends, the risks of data accuracy and bias, and strategies for integrating AI into daily CRE workflows.
Early AI Deployment Trends
It’s hard to underestimate the impact that AI has already had on the CRE industry, and the adoption rate is accelerating exponentially. Just as social media and online searches revolutionized communication and data access, AI is now enabling faster decision-making, predictive analytics, and automation of labor-intensive tasks in ways that were previously unimaginable. AI is already embedded in various elements of our daily life—whether through recommendation algorithms, voice assistants, or automated workflows—but its potential for enhancing the day-to-day activities of CRE professionals is only in the early stages of being unlocked.
“What’s exciting about AI is its powerful ability to turn vast amounts of real estate data into real, actionable insights. At LightBox, we’re leveraging AI to help our clients do things like streamline environmental due diligence, accelerate property research, and uncover untapped market opportunities.”
– Julia Belford, LightBox VP of Product Analytics
Indeed, AI’s ability to process and analyze vast amounts of data in real-time is perhaps its strongest asset, and it’s what makes AI such a game-changer across CRE where so many traditional processes are rooted in document review or the analysis of data sets. Key areas where AI is already making an impact include:
- Site selection and market analysis: AI can quickly analyze large sets of data on demographics, property characteristics, market barometers, and historical transactions to measure the strength of potential lending, siting, or investment opportunities.
- Tenant and lease management: Predictive analytics using AI are assisting property managers with tasks related to anticipating tenant needs, optimizing lease terms, and automating renewals.
- Investment and risk assessment: AI applications can help CRE professionals assess financial risk, detect anomalies in lease agreements, and provide real-time insights into portfolio performance much faster than traditional processes.
- Operations and maintenance: AI-powered building management systems are being used to monitor a building’s energy usage, predict maintenance needs, and improve sustainability efforts and reporting.
Data’s Growing Role in Supporting AI Adoption
Both speakers highlighted a critical element of AI that is often lost in the details: AI is only as powerful as the data behind it. That means that data accuracy and transparency are taking on greater importance in today’s digital world, and AI is bringing the CRE industry’s ongoing struggles with fragmented, unstructured, and siloed data to the surface.
To fully leverage AI, organizations must standardize data inputs and ensure consistency in data fields like property descriptions, lease terms, and market analytics. To improve data transparency, companies should establish clear governance over data ownership and integrity.
Last, the speakers also emphasized the importance of the human element. An AI model that is trained only on past transactions may overlook emerging trends observed by a seasoned CRE professional.
Tips for Practical AI Integration by CRE Firms
Many CRE professionals worry that AI adoption requires massive upfront investments, technical expertise, and staff training programs. The reality is that AI tools are becoming more accessible and user-friendly, and firms can start small by integrating AI into daily workflows slowly. Some early ways to adopt AI include:
- Identify new ways to automate repetitive or labor-intensive tasks, like summarizing large documents, analyzing Excel spreadsheets to uncover key trends, or generating reports on specific metros or property types.
- Enhance decision making by analyzing past deal performance and suggesting optimal pricing strategies for properties.
- Leverage AI chatbots to streamline client communications or summarize meeting notes for participants.
- Use AI-powered dashboards to optimize financial and operational insights by getting real-time updates on financials like occupancy rates, lease expirations, and cash flow forecasts on a property, portfolio, asset class or metro level.
The Future of AI as a Competitive Edge in CRE: What Can You Do?
If you’re overwhelmed with the pace of technological changes in CRE, consider a point Huh made during CREW’s live event: “What we’re seeing now is the slowest pace of technological change that we will experience in our lifetimes. AI’s capabilities will only accelerate from here.” This means that CRE firms and professionals who are slow to board the train risk not attracting top talent and falling behind competitors who are leveraging it in new, innovative ways and integrating it into daily business workflows. “If you’re hesitant about adopting AI, start small, stay curious, and focus on the tangible benefits—it won’t be long before you see the real impact on your business,” Belford observed.
Companieh and Huh suggested a few key action steps that CRE professionals can take to start wading into the AI waters. Companieh noted that “Every company and every individual in our industry is figuring this out right now so you need to lean in, not be a bystander. I challenge you to commit to spend an hour each week understanding how AI can impact their role, test driving various tools like ChatGPT, talking to your colleagues about how they’re using it, and taking advantage of free AI learning opportunities.”
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