CRE Principals and Investors On How to Actually Use AI in the Everyday

Commercial real estate leaders are fully embracing artificial intelligence in the everyday operation of their assets and even incorporating it into their decision-making as AI serves to inform their investment strategies.

During Commercial Observer’s “AI & Innovation Forum” on Feb. 5 hosted by CO Editor in Chief Max Gross, executives from some of the leading firms using AI to service CRE explained how their outfits have woven machine learning into daily routines. This interconnectivity ranges from delegating routine tasks to digital helpers to using AI to cut energy consumption and service customers better.

Steven Song, CEO of Diald AI, led a conversation with Karen Hollinger, managing director of investment giant KKR (KKR), in the opening segment “Entering the Era of AI: Revolutionizing Real Estate Business Models,” in which they pondered the rapidity of the technology’s integration into the industry.

“Where we invest is probably the most nascent in that we all know that AI equals data centers, but the implication of AI equals jobs or lack thereof is a little bit untested yet — but I think we’re starting to see some implications,” Hollinger said. “I would say that the biggest misconception is that there are folks who think AI isn’t here yet, that it has no implication for real estate. It might have an implication for that call center down the road, but it very much is here.”

Richard Sarkis, general manager of data and software at Altus Group, led the next panel titled “The Operator’s Perspective: Applying AI to Enhance Real Estate Transactions and Operations.” Eglae Recchia of lender Berkadia, Melissa Pianko of InterCapital and Winston Fisher of owner Fisher Brothers spoke about where exactly their firms were leaning on AI to fill the human gaps.

“Where we are using it today is for the tasks that humans turn out not to do very well,” Pianko said. “So an example is it turns out most people, most property management offices, do not answer their phones 100 percent of the time. Is [AI] perfect? Not quite yet, but does it answer the phone every time it rings? Yes, because it’s a bot.”

As for older companies fearful of change, Fisher categorized three uses for AI as he sees it.

“AI has the ability to be a loom, a slide rule or a crane. The loom replaces the job, right? The slide rule enhances your job, and the crane gives you superpower,” Fisher said. “People are very scared that AI is the loom, right? It’s going to replace my job. So framing it as this is a tool that’s about an enhancement — or to even make you actually be able to lift, so to speak, heavy equipment — that is the superpower.”

Some firms question what kind of return on investment they can get by integrating AI software into their business, which Recchia believes is difficult to quantify. In the end, you can’t knock it until you try it.

“I think until we got AI, it was actually really hard to talk about those returns,” Recchia said. “Showing what the world could be like when we got everything right is getting people excited, which is what you need in order to have people not only leaning into the change, but coming up with great ideas of how they think that technology could improve their lives.”

AI Spark’s David Nabwangu moderated the next panel, “Investing in the Future: Meet the Companies Fueling the AI Revolution,” in which Jake Fingert of venture capital firm Camber Creek, Matias Recchia of analytics company Keyway, Nima Wedlake of VC firm Thomvest, and Canay Deniz of Ren Systems talked about how AI software helps companies waste less time on tedious tasks.

“I describe it as sort of a platform shift analogous to the personal computing revolution [or] what we saw in mobile a couple decades ago,” Wedlake said. “There’s sort of this new foundational technology that entrepreneurs, like some of the folks here, can utilize to build valuable products for end users. It’s crazy to think that chatGPT was launched only two years ago, and so much has happened since then.”

Fingert said his firm continues to figure out where AI best fits in Camber Creek’s investment strategy. “I think at least in the near term, anything where you’re leveraging data documentation — which is a lot of real estate — there’s a lot of opportunity for AI to come in and help groups be better,” he said.

Recchia went into further detail from the Keyway perspective.

“If you’re doing your due diligence, instead of having a human go through all the leases, you can go into our KeyDocs tool, upload all of the leases, create a lease abstract, create a rent roll abstract, analyze which leases have exceptions, and analyze that in a minute, instead of like a week of analysts working on that,” Recchia said.

But a one-stop shop for AI assistance is not always better, according to Deniz.

“If OpenAI tomorrow has a huge security link and large corporations decide not to use it, we can shut it down in a second and move to another model,” Deniz said. “If a company has a large contract with Google and they only want us to use Gemini on the back end, we can do that. So I think there’s also value in just not being dependent on only one of these large models.”

Mark Hallum can be reached at mhallum@commercialobserver.com.