Is AI Really Ready for Real Estate?
Artificial Intelligence (AI) has been touted as the key to unlocking millions of dollars in savings by creating business efficiencies. But are all these claims leading to realized value or is it just hype?
According to a survey by Deloitte, 46% of enterprises who have implemented AI reported achieving low outcomes from their deployments and another 26% reported good outcomes but limited deployment. If 72% of the organizations surveyed are struggling to realize the promise of AI, does that mean it’s not worth doing?
At CBRE, we don’t think so; we believe there’s value in leveraging AI for several commercial real estate use cases. And indeed, the news isn’t all bad. At the end of 2021, McKinsey & Company conducted a survey that found there was a 6 percent increase in AI adoption in at least one function from the prior year. However, the most commonly adopted use-cases were focused on service-operations such as contact center automation with the creation of things like chatbots. We have seen that these types of use cases are great opportunities to reduce the amount of time employees spend on mundane tasks.
Today, I’ll discuss areas to increase the breadth of opportunities to leverage AI, and in a future article, I’ll share some keys to success. So, let’s dive into potential AI use cases in the areas of unlocking efficiency, improving decision-making, and enhancing experiences.
First, I’ll touch on efficiency. To be sure, using AI for service-operations optimization is primarily about efficiency. But there are other ways to use AI, automation and machine learning to drive efficiency. Think about the paperwork involved throughout the commercial real estate life cycle – lease documents, invoices, property brochures -- the list goes on and on. Digging out relevant data can be time-consuming for property management professionals. To reduce the strain on our personnel, we automated one hundred processes and built a capability to automate data extraction from leases that led to a 25% to 40% time savings.
Finding efficiencies through AI need not be limited to internal operations. Many of our occupier clients are concerned about rising energy costs and are seeking ways to reduce their carbon footprint. AI and machine learning can aid in achieving these goals by creating algorithms that integrate IoT and building management system (BMS) signals. That integration can allow us to see when spaces in a building are not in use and to automatically turn off lights and HVAC systems. The algorithms also can automate remote and on-site asset maintenance protocols. Automating these functions can free up thousands of hours of maintenance technicians’ time for higher-value needs.
AI and machine learning can be a great way to improve and accelerate decision-making. This is especially important for real estate investors because they need to understand a myriad of variables to decide when to dispose of assets and at what pricing level. To give European investors rapid access to asset and portfolio data, we built an automated valuation model that leverages machine learning. Given the success in Europe, we are now expanding the model into other markets.
AI works in the background when we open our phone and it suggests apps for us, or when we use predictive text to send a message. Simple and intuitive AI simplifies tasks of daily life. Experiences like this don’t have to be limited to our personal lives. At commercial properties and corporate facilities, we manage, we apply AI recommendation engines in CBRE Host, our proprietary and patented workplace experience platform. AI works within Host to learn a user’s routines and preferences. It then helps Host make suggestions on what might interest the user, such as workplace amenities or which colleagues to connect with and where. The more the user acts on the recommendations, the more the app learns, and can refine its recommendations.
AI, automation and machine learning can drive value in commercial real estate. And of course, there are many use cases beyond the ones I mentioned. The next step entails capitalizing on AI to achieve success. Next time, I’ll share thoughts on how we got started on our journey and lessons we learned along the way.
Industry’s top-of-mind topics such as AI, machine learning and many others, will be featured at this year’s conference education program and presented by subject experts. Realcomm | IBcon 2022 will be held on June 15-16 (Golf Outing: June 13 | Precon Events: June 14) at the Orange County Convention Center in Orlando, FL. Register today!
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