Artificial Intelligence in Commercial Real Estate
Artificial intelligence is designed to assist people at home and at work. For example, tell Alexa to set a timer for 10 minutes and you’ll have a perfectly hard-boiled egg. Not getting any more emails from that Nigerian prince trying to give you money? That’s because AI technology is behind your spam filter. In the workplace, AI is performing repetitive tasks, leaving humans more time to focus on creative work and relationship building. And artificial intelligence in commercial real estate is impacting just about everyone – brokers, investors, tenants, and property owners and managers.
What Is Artificial Intelligence?
AI refers to technology programmed by humans that uses algorithms, logic and data to make intelligent decisions and solve problems. The term artificial intelligence actually dates back to the mid-1950s when it was mostly discussed in academic circles.
Today, there are also subsets of AI. With machine learning (ML), there is no need for specific programming; a machine is given access to data that allows it to learn new things based on past experience and historical information. Deep learning is a type of ML that is based on artificial neural networks that support unsupervised learning from data.
What AI Can Do for Commercial Real Estate
For all the worry that AI has the potential to push people out of jobs—and much research shows that it will generate more jobs than it eliminates—nothing could be further from the truth in real estate. In fact, artificial intelligence helps everyone in CRE work more efficiently and effectively.
The information that AI already enables brokers to offer investors is valuable and extensive. AI can aggregate data to help investors make more informed decisions. That data may include details about a building’s energy consumption, rent and occupancy rates, market performance and more. Brokers and investors are then able to analyze the information and have greater confidence in a real estate investment.
For tenants, AI can make lease negotiations less daunting. A tenant and tenant rep can better negotiate a fair deal based on the hard data that AI provides. With comparable prices of similar spaces in a neighborhood, AI can even crunch the numbers that add up to a fair deal. Saving both time and aggravation, artificial intelligence can help close a deal more quickly, too.
For property owners and managers, AI offers a means to substantial savings from energy efficiency upgrades, such as smart LED lights and self-programming thermostats. As a result, an owner’s bottom line benefits and tenants are often more satisfied.
In addition, artificial intelligence video analytics has significantly improved security in commercial buildings. However, as this level of security is now almost expected, the problem has become the sheer volume of data collected and the personnel required to effectively monitor video screens and the buildings they surveil.
AI-based security surveillance systems can monitor videos 24/7 without the concern of human boredom or the chance of missing vital information. Then, when suspicious activity is recognized, the system can alert security personnel to assess the risk and choose the best response.
Of course, AI is not meant to offer a one-size-fits-all solution. Using artificial intelligence to your greatest advantage depends on having a thorough understanding of your business model, your market and your real estate needs. That’s where a CRE professional comes in. Combine a broker’s knowledge with AI capabilities, and you’ve got a winning team!