Artificial Intelligence in Real Estate | Innovation & Efficiency
Real estate investment has historically been an industry left relatively unchanged by technological environments. However, the waves produced by the groundbreaking uses being discovered in generative artificial intelligence and their applications in real estate will soon become more apparent. From generating new demand in markets to generating renderings for building design, AI’s effects and uses will be widespread in the industry.
Transforming How People Live, Work, and Play
OpenAI estimates that 80% of jobs are exposed to AI disruption, and those in real estate are no exception. However, emerging applications for artificial intelligence in the world of a real estate professional have acted as more of a ‘co-pilot’ rather than an ‘auto-pilot.’ These tools are not expected to replace individuals working in the industry but rather empower them to engage in more critical tasks and complete repetitive tasks more efficiently, whether in the design phase of an architectural design team or the underwriting and transactions process of investment teams.
A Changing Infrastructure
It seems that new forms of AI or a new application are emerging daily, and often from different companies that have come to the market with a specific focus. As a result, artificial intelligence is expected to drive demand a) for specific types of real estate and b) towards certain areas/markets, more specifically R&D Flex/Data Centers, and in major tech hubs such as San Francisco, Austin, Boston, Seattle, and New York.
Accelerating and Extending PropTech Advances
The real estate industry has been relatively proactive in adopting new property technologies, or PropTech, over the past few years, especially regarding operations. Although generative AI applications in real estate are still in their early stages, early adopters of AI-powered solutions are already seeing returns. Some of the areas where AI is seeing its greatest application include:
- Investment Management – Prediction of shifts and opportunities trained on years of transactions.
- Leasing & Property Management – Conversational AI promoting efficient resident communication and service provision.
- Energy Management/Sustainability – HVAC management allowing for saved energy costs and increased comfort & air quality.
- Capital Projects/Construction – AI-powered construction site videos and documentation allowing for better data capture, tracking, and analysis.
While these are just some of the ways AI has improved the real estate industry, the possibilities are endless.
AI Provides Valuable Tools To Empower Experienced Sponsors
We will continue to research and leverage new AI technology as it emerges. While AI cannot replace a sponsor, it does provide valuable tools that allow our team to gather data, streamline processes, and draw conclusions more efficiently. The real estate investment industry still does and will always rely heavily on the expertise of an experienced sponsor and their industry relationships, as every deal is different and presents its own specific challenges/nuances.