Presented By: Partner Insights
How Artificial Intelligence Will Change the Way CRE Does Business
The Commercial Observer Partner Insights Team, in association with Berdon LLP Accountants and Advisors and Bractlet, recently hosted a webinar on the impact of AI on commercial real estate. Moderated by KP Reddy, founder of Shadow Ventures, the webinar featured insights from Arup Das, CEO of Alphaserve Technologies and AI and a technology adviser for Berdon; Alec Manfre, CEO and co-founder of Bractlet; and Gijo Mathew, chief product officer for VTS. Here is an overview of their discussion.
Das said that in determining an AI strategy, both setting key performance indicators (KPIs) and determining in advance how the AI will be used are crucial.
“Real, measurable KPIs are very important, [as is] really understanding where the AI application is going to be used,” he said. “There is no one-size-fits-all approach. AI is not a single platform. You might have multiple platforms you have to integrate to get to your final result.” Das also mentioned that given the recent explosion of data, AI can help determine real-time valuation of CRE properties.
Das also sees AI making great improvements in general workflow optimization. AI can use natural language processing to cull the most important information from contracts, for example, leading to less paperwork participants need to read. The technology could also be used to create personalized customer service experiences.
Manfre told the webinar listeners that when working with building owners, Bractlet collects and structures a vast amount of data from sensors, design drawings and operating teams that can be used to understand how building systems can be optimized and invested in.
“Once we have this data, we have to figure out what it means,” Manfre explained, offering examples. “How is the building currently operating? Is it working correctly? How is it being controlled? We ultimately turn this data into a physics-based simulation model or, as we call it, a ‘digital energy twin.’ This is an ambitious endeavor, so, to scale this type of platform we need to automate our analytics and processes as much as possible. AI is a technology that enables us to do so and allows our software to provide building owners with analysis on how they need to invest in their buildings, what they can invest in and what their returns are ultimately going to be.”
Mathew said that the big question for CRE in terms of using AI now is, “do we have enough data to really leverage and harness the power of AI machine learning and deep insights for this industry?”
Mentioning that his company, VTS, has around 11 billion square feet of commercial real estate on their platform, he said that the sheer quantity here “really starts to unlock data,” including stacking plans, tenant information, space data, lease data and lots more, with all of this “starting to come together in more digital forms where you can start to ensure data quality.”
Taking all this into account, the ongoing challenge will be how to secure value within all this digitized data. Mathew uses the example of lease rolls, where the data can not only inform on past patterns but also on where lease rates are likely to go in the future.
“Asset managers and people that run these assets cannot just predict the value of what they have, but try to optimize,” Mathew said. “And that’s the goal—not just helping predict value for organizations but be[ing] able to give them data and insights to allow them to optimize value.”
Click here to view the full webinar.