Waiting for AI solutions to become a necessity in commercial real estate puts you behind competitors.
Artificial intelligence (AI) systems continually evolve and defy expectations, which we have seen throughout 2023 with the arrival of Generative AI (GenAI), and vast improvements to Large Language Models (LLMs) and Natural Language Processing (NLP). To fully harness the potential of these tools, proactive policies are paramount for real estate asset managers, particularly in the competitive landscape of commercial real estate (CRE). This means integrating AI before it shifts from a “nice-to-have” to a necessity.
Proactive integration not only means a competitive edge, but it also means that these systems have more time to collect data and adapt to portfolio nuances. By the time competitors integrate, your AI systems will be seasoned tools in your technology lineup, outperforming newly integrated softwares.
Historically, machines were bound by programming, executing commands based on predetermined inputs. The advent of advanced AI in real estate systems ushered in a new era of proactive responsiveness. Unlike traditional automation, AI models possess the unique ability to self-tweak and refine operations continuously based on new data.
The longer these systems are integrated, the more effective and accurate their responses become. By embracing proactive policies, real estate asset managers ensure that AI becomes a deeply integrated tool within their software ecosystem, staying ahead of the curve with transformative insights.
By using AI-powered software, asset managers can automate the data collection process, ensuring that real estate data is consolidated, constantly updated, and most importantly, clean. Early integration of tools means real estate asset managers can rely on a system that is fully integrated with their data. When it comes to AI integration, it’s time to enact proactive, not reactive policies, to ensure your portfolio remains competitive.
The benefits of proactive technology policies.
Real estate organisations face challenges in fully integrating digital capabilities, limiting their competitive edge. The aftermath of the 2020 pandemic exposed the necessity of embracing tech solutions before crisis calls for them.
Initially, digital adaptations were survival tactics, enabling businesses to maintain capacities during remote work. Teams that were already able to effectively work across hybrid work platforms, such as Zoom, Microsoft Teams, Slack, and others, were positioned to suffer smaller losses when in-person work became impossible.
With hindsight, we can now see that COVID-19 drastically increased the rate of digital transformation across businesses. When McKinsey & Company asked companies about their digital integration, they found respondents are “three times likelier now than before the crisis to say that at least 80 percent of their customer interactions are digital in nature.” Those who adopted the infrastructure to support this prior to the crisis were better positioned once remote working became a necessity.
Prominent real estate organisations that embraced early technology integration demonstrated its value in times of crisis. To adopt proactive policies towards technology, organisations should leverage their boards to drive greater long-term value and informed decision-making.
EY‘s poll revealed a significant shift in mindset, with 69% of commercial real estate owners identifying technology adoption as a high strategic priority. When it comes to AI solutions in CRE, embracing platforms should be a high strategic priority. Those who fail to be proactive in their integration will be left behind in comparison to competitors.
Overcoming challenges in integration.
Adopting a proactive mentality involves addressing the lack of fully integrated, end-to-end solutions. Companies that embrace technology must facilitate seamless connections and data sharing across platforms. This shift is critical for staying competitive and future-proofing operations.
Organisations must be vigilant about market standards and protocols concerning data quality, intellectual property rights, privacy, and data security. For example, IP rights, privacy and data security. Without prior thinking about these issues, commercial real estate asset managers could run into potential problems during AI integration.
Addressing societal risks and environmental legislation is also crucial in developing a comprehensive AI in real estate integration strategy. Most notably, understanding the carbon impact that comes with digitisation, that may impact sustainability reporting.
Organisations must be reflective on certain questions: what are potential business and societal risks that come with introducing new technology? What are the AI applications that we need to be prepared to pilot now and in the future? This proactive approach positions real estate asset managers at the forefront of technological advancements, driving positive industry change and ensuring long-term success in commercial real estate.
Becoming proactive, not reactive.
Embracing proactive policies and AI in real estate is no longer a choice but a strategic imperative. The evolving nature of AI systems and the competitive landscape of the real estate industry demand a forward-thinking approach.
By understanding the learning-driven nature of AI, adopting proactive policies towards technology, and addressing security concerns, asset managers can position themselves at the forefront of positive industry change, driving long-term success in commercial real estate.
