Generative AI [artificial intelligence] has taken the world by storm, especially with the proliferation of OpenAI’s massively popular ChatGPT. However, these generative AI models can potentially make an even greater impact than one might imagine.
In the commercial real estate sector, generative AI has inspired a massive change that will make agents’ jobs more efficient and fruitful, creating a win-win situation for agents and their clients alike.
Artificial intelligence will democratize the CRE sector
Many have hailed generative AI as a revolution because of the technology’s ability to enhance the efficiency, speed, and convenience of operations across industries. While these are all true benefits of AI technology, another shift it has inspired might be even more influential: the democratization of a previous knowledge gap. Now, those in the CRE sector — whether they have been working for decades or are new to the game — have a much more equal playing field to maximize their potential.
Indeed, artificial intelligence can be seen as a “great leveler” in the CRE sector in many ways. The technology unlocks hyper-targeted content creation and outbound messaging, empowers non-coders to code, makes diligence and risk assessment possible with the click of a button, and allows anyone to think through a strategic decision with an unparalleled level of insight, allowing CRE agents to maximize their output and make the best use of their time.
Ultimately, the biggest benefit CRE agents who adopt artificial intelligence technology will see is a lower bar to be great with a team of one. Such a level of service once required participation in a large firm, a huge team for back-office support, and a large Rolodex with decades of experience. Leaders in the AI space are foresting the first single-employee, billion-dollar company. This is potentially just as attainable in CRE given the value of transactions and the ability to scale and automate human tasks such as deal flow management, lead sourcing, underwriting, and content creation through AI agents and copilots.
Applications of AI technology in CRE
Even more so than some other industries, commercial real estate has shown the potential to be outright revolutionized by AI technology. Some of the most exciting use cases for artificial intelligence in the CRE sector include:
Small language models: The most obvious use case for generative AI in CRE is small language models, which offer easily customized chatbots (or “assistants”). Clients can interact with these models in real time using apps with multi-modal interfaces, giving them a powerful resource to answer questions and address concerns at their convenience.
AI co-pilots: Many CRE firms have begun to use artificial intelligence models as “co-pilots,” personally trained to the needs of their organization to assist agents in identifying and capitalizing on new opportunities.
AI autonomous agents: Some businesses in the CRE space are even seeing the potential for “autonomous” agents powered by AI technology. These models can surface opportunities 24/7 from the open internet and execute those opportunities in a scalable fashion, allowing clients to get the best possible deal, often much more quickly and efficiently than a human agent would.
Computer vision and machine learning: Artificial intelligence technology has made functions like satellite imaging and modeling — once reserved for a select few — more accessible than ever before. This use case can allow agents in CRE to conduct essential operations with incredible ease, such as autonomous site selection and best use assessments.
Generative video: Recently, generative AI has expanded its capabilities beyond language models to offer generative video. Using AI-generated video, agents in the CRE industry can offer more vivid virtual tours, conduct better property modeling, improve space utilization assessment, and even duplicate their likeness for real-time interaction with clients — all with minimal effort.
How CRE agents can learn to coexist with artificial intelligence
For many CRE agents, the question then becomes a matter of whether they will be replaced by this new paradigm of AI. While artificial intelligence could eliminate some tasks from agents’ plates, it allows them to focus more on the aspects of the transaction that only they can do: managing relationships and closing deals. Thus, adopting AI in commercial real estate becomes not an elimination of work but rather a transformation of it, as agents reprioritize their focus on other aspects of their CRE operations.
When used as a “co-pilot,” artificial intelligence technology can help CRE agents with some of the more menial tasks of their jobs, including:
- Data collection: Using optical character recognition (OCR), AI co-pilots can help CRE agents automatically process data and standardize diverse document formats, allowing them to significantly streamline their data collection processes.
- Underwriting: CRE agents can use AI co-pilots to automate the underwriting process using machine learning to easily batch deal complexities.
- Administrative tasks: AI co-pilots can conduct some of the more menial tasks of the CRE business, from needs list generation to digital signatures, emails, and customer service. All this information can be conveyed and managed through a queryable and dynamic information repository that gives clients and agents access to a reliable source of information on demand.
- Database creation: AI models can create a database to simplify lender and investor matching, especially when used in conjunction with CRMs like Hubspot. This allows agents to find more quality deals, pair with investors, and close them faster.
- Performance metrics and analysis: AI models can then generate automated reports on loan processing stages, allowing them deeper levels of actionable insights.
Some CRE businesses may take AI technology even a step further, allowing it to operate autonomously over the first stage of CRE transactions. AI models could identify potential borrowers, analyze their requirements, and categorize them based on predefined criteria to generate leads. Then, the model could engage with prospects through chatbots, email campaigns, and targeted advertising — all the while gathering intent data and prioritizing leads based on the likelihood of conversion. After this point, the human agent can step in and close the deal, ensuring the best use of agents’ time and maximizing their output.
Artificial intelligence is one of the most powerful technologies ever created. If those in CRE learn how to effectively and responsibly harness its innovative power, they can dramatically improve their efficiency and effectiveness in executing opportunities. AI will change commercial real estate for the better, and savvy agents will become early adopters of this technology to stay ahead of the curve and reap its massive rewards.
Aaron Rafferty is the Co-founder and CEO of Standard, a technology incubation hub working with stakeholders to create 0 to 1 solutions to key issues in their business. Under this umbrella includes CREHawk, a commercial real estate workflow automation engine, as well as The Tech Buzz, a media company that delivers daily tech and AI news, insights, and deals to an audience of 700,000 investors, founders, and tech enthusiasts.