Building the Future of Real Estate With AI by John Bibeau, VP Commercial Real Estate
Over time, artificial intelligence (AI) has become an integral part of many daily experiences, ranging from the routine, like Google searches and Siri queries, to the more involved, such as lifesaving healthcare applications that predict disease evolution and accelerate drug discovery. Looking ahead, AI will be at the heart of pivotal emerging applications across numerous industries — and commercial real estate is no exception.
How AI Enhances Real Estate Operations
AI can provide distinct benefits for the real estate sector, which has undergone dramatic changes in recent years. Declines in the fortunes of brick-and-mortar retailers, plus the widespread shift to remote work in 2020, have raised the stakes for retaining tenants and also led investors and property owners to increase the amount of concessions they offer. In this context, a full understanding of the terms and conditions contained in lease contracts is critical, and AI can make a material difference here.
AI already has versatile applications in real estate, with major use case including:
- Building Management – AI can automate various maintenance tasks and schedules, aiding in the remote control of various processes including demand generation, equipment predictive analytics, and facility cleaning needs. This automation leads to opportunities to reduce expenses and increase tenant satisfaction.
- Transaction Marketing – With AI platforms, it’s easier to automate marketing campaigns, provide virtual tours and 3D floor plans, track proposals and facilitate instant feedback and transparency between owners and brokers, all of which expedites leases and drives up net operating income.
- Property Valuation – Property values can be algorithmically determined using AI, by correlating market statistics, property characteristics, natural disaster risks, and other metrics into intelligent, data-driven assessments.
- Tenant Communications – Some property owners have created AI-powered tenant portals, to enhance communication with tenants through a more supportive, responsive experience.
Overall, after years of being relatively slow to adapt to technological change, the commercial real estate industry has embraced these benefits and others possible through AI. Now, commercial real estate professionals are seeking to level-up their decision-making with deeper and exponentially faster data capture and analysis, particularly in the domain of document intelligence.
Taking the Next Step With Document Intelligence
AI-driven document intelligence has the potential to provide all stakeholders in a real estate transaction with more streamlined processes, better-structured data for robust reporting and analytics, and faster full-text searches, completable in seconds rather than days or weeks. Using a Document Intelligence solution, it’s possible to:
- Process anywhere from one to thousands of documents at a time, extracting detailed information from each.
- Substantially reduce risk by being able to pinpoint and understand lease obligations and opportunities across an entire portfolio.
- Answer questions more quickly, thanks to the elimination of informational silos and shared understanding of key documents.
- Accelerate due diligence by evaluating contracts more efficiently, leading to faster M&A deal execution.
AI enables document intelligence without the significant capital expenditures and human effort once required for truly understanding what was in a contract or agreement. Moreover, AI directly addresses some of the longstanding challenges in document management.
Seasoned real estate experts know the difficulties inherent in managing the large volume of supporting documents involved in a transaction. Transactions involve a complex mix of agreements governing multiple rights and obligations, including purchase and sales contracts, commercial leases, addendums, amendments, estoppels, work letters, and insurance binders, among others.
For example, in addition to basic lease terms, a commercial tenant might have obligations or options regarding their ability to expand or contract their space, whether or not they have a right to renew, terminate, or even sublease and, if so, what determines those rights. Organizations must also ensure the continuous alignment of such documents with a single source of truth in their system of record. However, data is often stored in separate environments, leading to disparities. These information silos and manual processes create specific challenges related to…
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