Artificial intelligence (AI) is significantly transforming the landscape of commercial real estate, with its applications influencing various aspects of business practices. Two years have passed since OpenAI's ChatGPT model entered the market, an innovation backed by substantial investment from Microsoft, underscoring its potential impact. As businesses and professionals adapt to these advancements, it is becoming increasingly essential to recognise both current applications and future trends connected to AI automation in the sector.
One notable use of AI is in drafting comprehensive narratives and job descriptions. For example, a committee at Lee & Associates recently utilised AI to create a job description for a new president. Candidates were asked to submit business plans, which the AI then analysed and compared to the job description. From this analysis, the AI also generated ten interview questions and established a scoring system for candidate responses. Although the AI selected a candidate who ultimately did not secure the ratifying vote, the exercise illustrates the tool's potential to enhance decision-making processes.
Lee & Associates outlines eight critical steps in the brokerage process that AI is set to influence:
Sourcing: AI efficiently processes extensive datasets, including public records and online property listings, thereby identifying suitable properties or clients. Machine learning techniques can analyse historical data and current market trends, enabling agents to uncover investment opportunities that may otherwise go unnoticed.
Finding: With AI-powered platforms, agents can refine property searches more effectively by inputting specific client requirements such as location, size, or budget. The AI rapidly generates tailored property listings, and advancements in virtual tours provide clients with immersive explorations of spaces without needing to visit in person.
Qualifying: AI streamlines the lead qualification process by employing chatbots and integrating customer relationship management (CRM) tools to engage with prospects, ask qualifying questions, and prioritise leads. Furthermore, AI can assess creditworthiness and tenant histories, ensuring that prospective clients meet necessary criteria.
Controlling: Managing critical timelines and information flow is crucial to successful deals. AI-driven project management software helps agents stay organised, automate follow-ups, and monitor deadlines. Natural language processing can also evaluate communication patterns, alerting agents to potential deal risks.
Execution: As negotiations proceed, AI tools analyse lease terms, purchase agreements, and market comparisons to highlight crucial aspects or risks. Smart contracts harnessing AI and blockchain technology can streamline execution tasks, reducing negotiation time and ensuring compliance.
Closing: The closing process is enhanced by AI, which automates workflows and document generation, thereby meeting compliance standards. The technology can track essential components such as escrow, title searches, and financing approvals, diminishing the chances of delays. Digital signature platforms further simplify these tasks.
Compensation: AI systems can assist in tracking compensation agreements to ensure fairness and accuracy. By calculating commissions and monitoring payments, these AI applications provide transparency in reporting. Predictive analytics may also model potential future compensation scenarios based on agents' ongoing deals.
Continuation: Post-transaction engagement is vital; AI tools maintain relationships with clients by automating follow-ups and sending personalised updates. The technology can flag patterns indicating when past clients may be ready for new opportunities, ensuring agents remain relevant.
The evolution of AI in commercial real estate is notable not only for its current applications but also for the forecasted impacts on business practices. As organisations embrace these technologies, their ability to streamline operations and improve client relationships will likely continue to shape the industry's future landscape. Allen C. Buchanan, a principal with Lee & Associates Commercial Real Estate Services in Orange, contributes insights into these developments, showcasing the growing integration of AI into everyday business functions.
Source: Noah Wire Services