Commercial real estate is entering a new era of artificial intelligence (AI) that could have profound implications for the future of real estate. Investors, developers, brokers, managers and other stakeholders who embrace AI can unlock significant value, drive operational efficiency, and automate tasks to save time and money. With the acceleration of AI and machine learning, real estate professionals can leverage technology to drive a more interconnected industry driven by disruption and innovation. Here are five ways AI will change commercial real estate (and how you can benefit):

1. Market Analysis

It’s no secret that technology can help provide basic information about potential target markets. With AI, however, investors can predict market trends, understand crime patterns, analyze growth prospects, and understand rent dynamics faster than ever. This means developers can understand which local markets can offer the best financial returns. Alternatively, developers can assess all the new construction projects in a given locale. Brokers could determine, with precision and speed, which homes are likely to be sold in the near-term for which price. By understanding microeconomic conditions, real estate professionals can leverage AI to know more about a market without being physically present in that market. That is a tremendous value proposition that will take shape and transform the trajectory of market analysis. 

2. Investment Analysis

AI will revolutionize investing through data analysis. Companies who can analyze vast amounts of data with precision and speed will disrupt commercial real estate. The ability to garner new data insights through AI-driven models can reduce human error and eliminate manual tasks. For investors, this means access to real-time data and the ability to make more accurate forecasts. Imagine a buyer who uses AI knowing more about a property than the seller who currently owns the property. This may have been unimaginable years ago, but now it is a growing reality. The information asymmetry can be favorable to adopters of AI. Imagine the ability to update valuation models in real-time automatically based on the latest market and rent dynamics, all which can impact the valuation of a property. The result is optimized decision-making through more information and data that is easier to acquire, which creates further transparency in a marketplace that often has difficult to acquire information.

3. Cost Reduction

AI will reduce the cost of commercial real estate, whether you are an investor or a developer. Why? Historically, onsite due diligence, market analysis, and property evaluation could involve multiple teams all traveling to a property location. With AI, the bulk of the analysis can be completed before a due diligence team boards an airplane. This paradigm not only creates cost savings, but saves significant time that can be redeployed into other areas to drive returns. The power to acquire information and analyze data quickly and at a lower cost will give AI adopters a competitive advantage because they can analyze markets and target properties faster with fewer human personnel. This shift allows for more accurate analysis and due diligence and a more robust, error-reduced investment process. 

4. Optimize Operations

Property managers can optimize operations through the power of AI. With machine learning and automation, property managers can create streamlined workflows like never before. For example, tenant screening, lease management, customer service and more can all be powered by AI. Property managers can also use AI for predictive maintenance to determine when an elevator, for example, needs to be repaired or a part needs to be replaced – all before any warning signs have arisen. The ability to auto-schedule maintenance and identify potential mechanical failures before they occur can not only save costs but also maximize safety and the useful life of a property asset. Therefore, AI can make a property manager’s job easier while also increasing quality of life for residents. Property owners can benefit through reduced overheads and operational costs.

5. Sustainable Living

AI can serve as a major conduit and partner to creating a sustainable living environment for residents. AI can help maximize space utilization and increase green spaces for residents. In addition to spatial configurations, automation can save energy costs through regulation of lighting, water and temperature by integration with the electrical, plumbing and HVAC systems. Property owners and managers not only can optimize utility costs, but they can do in a sustainable way with full insights. Commercial real estate owners can also monitor carbon footprints and ensure compliance with environmental regulations through the deployment of AI, which can sync with regulations from local governments.

Conclusion

Commercial real estate stakeholders must leverage the power of AI to drive investor value, streamline operations, power sustainability, increase speed and efficiency, and automate human tasks with precision and without error. Those investors and companies who invest in AI technology today will stay ahead of the curve, drive profitability, gain new insights that competitors miss, and provide the foundation for future innovation and growth. Every company needs a clearly articulated AI strategy – what’s yours?