🇮🇹❤️🇺🇸 Commercial Real Estate Brokerages advantages in AI

🇮🇹❤️🇺🇸 Commercial Real Estate Brokerages advantages in AI

Commercial real estate hasn’t come crashing down. Sure, foreclosures are creeping up, but many property owners are finding ways to navigate this high-interest rate environment. The combination of soaring interest rates, limited financing options, and low supply has led to a significant drop in sales volume. This has intensified competition among brokers, making each deal more precious than ever. Unlike in past buyer’s markets, sellers aren’t offering deep discounts, pushing prices to the brink of financial viability. So, what’s a broker to do? The answer lies in the transformative power of Artificial Intelligence in Real Estate.

The Data Dilemma

Every real estate deal involves mountains of data. Unlike stocks or commodities, real estate data is scattered across various sources and formats—often in clunky PDFs. Traditionally, this data entry task falls to the lower rungs of the organization, sometimes to those with minimal training. This is where AI shines. AI Solutions for Real Estate are stepping up to handle the unstructured nature of this data.

Back in 2016, JLL took the plunge by partnering with Leverton, a German company, to automate their lease management. According to JLL’s CTO, this ongoing process remains incredibly complex for a company that generates millions of documents annually in dozens of languages. Following JLL’s lead, other major brokerages have embraced AI. CBRE, for instance, has created an “AI playground” for their team to experiment with different use cases. As Sandeep Davé, CBRE’s Chief Digital Officer, puts it, “We’ve created a self-service AI playground, adding about 150 users weekly through word of mouth. It’s a place where our teams can query real estate data, have models point to real estate documents, query those documents, and translate them into multiple languages.”

Streamlining Underwriting

Big brokerages have made significant strides in leveraging AI to streamline the underwriting process. Their strategies vary—some team up with startups, while others partner with established tech giants. Cushman and Wakefield opted for the latter, integrating Microsoft’s Azure AI into their workflows. Meanwhile, Marcus and Millichap have partnered with the tech firm Archer to give their brokers a competitive edge. Interestingly, Newmark has taken a different route, focusing on talent recruitment over technology investment. Despite this, they launched a dedicated data center and cloud computing real estate division last year, indicating their belief in AI’s potential.

A Growing Tech Ecosystem

Newmark’s strategy might seem puzzling, but it’s clear they’re banking on the ever-expanding array of tech companies that offer AI-powered solutions for real estate. From document parsing services to AI-enhanced real estate platforms, there’s no shortage of options. PropTech giants like MRI and Yardi, as well as brokerage-focused tech firms like Buildout, are all in the game. Specialized services like DocSumo offer document abstraction for commercial real estate, while Proper.ai integrates AI into specific real estate platforms.

The Competitive Edge

Commercial brokers are constantly seeking ways to save time, cut costs, and close deals faster. With AI in their arsenal, they have more tools than ever before. Most large brokerages are either developing their own AI capabilities or partnering with AI providers. Others are using a mix of the growing number of tools available, even if it comes at a cost. If the market remains sluggish, we can expect even more investment in AI to give brokers a leg up. The real question is, who will come out on top in this AI race?

The Future is Bright

Brokerages that have heavily invested in AI expect to see significant returns through increased deal volume and easier recruitment. Those who have been more cautious hope to benefit from specialized tech companies’ expertise. In the end, brokers who can best harness AI’s capabilities will see the most success, regardless of their initial investment.

Conclusion

As the commercial real estate landscape evolves, the adoption of AI technology will play a crucial role in determining success. Remember, “The best way to predict the future is to create it.” So, whether you’re a seasoned broker or just starting, embracing AI in Real Estate Technology is your ticket to staying ahead of the curve. The future is bright, and the opportunities are endless.