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AI is Changing CRE and Creating New Opportunities

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Artificial Intelligence (AI) has become top of mind for CRE owners as it impacts the industry in new and significant ways. AI can be leveraged to transform and improve how stakeholders operate and transact. It can increase productivity, reduce operating costs, facilitate research and help close deals.

Real estate tech experts are saying that AI is “re-coding” the industry. AI has the potential to help CRE operators in nearly every aspect of their business, including asset valuations, by aggregating thousands of CRE data points that enable buyers, sellers and investors to make fast decisions based on up-to-the-minute information. Additionally, CRE leaders are using AI in their marketing processes to create targeted ads and listing copy as well as blog articles.

Enhancing CRE services with chatbots and more

With natural language processing improvements in ChatGPT (GPT-4 was released in March 2023) and other AIs including large language models (LLMs), companies can offload various administrative tasks including creating high-level reports, updating current listings and scheduling property showings. For CRE businesses, significantly shortened response times result in more sales. Expanded AI enables advanced request management that optimizes customer service and reduces the burden on both onsite and corporate staff, especially for process-related questions such as, “when will the maintenance tech come?”

To streamline CRE maintenance operations and potentially reduce visits, AI can dispatch work orders more effectively and prioritize work order processing. Using GPT to create and update work orders and also run reports is a big time saver for site teams.

App assistants that respond to speech requests such as “run a rent roll” or “calculate near-term revenue risk” can provide fast information for smart decisions and generate reports. GPT-4 also has increased mathematical abilities, so it can be given sheets of data and infer conclusions. Have it review code and analyze documents to evaluate if there are ways to optimize your final product.

Streamlining operational tasks with AI

A key benefit of AI in CRE operations is reducing low-value efforts for staff, such as data entry and invoice processing. Yardi is leveraging a machine learning OCR engine to improve and expedite invoice processing. With a capability of scanning up to 200 invoices at a time which are then uploaded for review and verification (highlighting those needing attention), Yardi PayScan helps clients reduce the cost of manual self-scanning and keying by 97%, in addition to saving lots of time.

Managing financials with AI

Experienced brokers can recall managing financials and performing calculations manually. Now, AI can crunch the numbers quickly via machine learning, based on past financial models and results to obtain reliable outputs to work with. Investors calculating NOI and ROI can use AI tools to understand what factors to focus on when considering deals.

A crucial component of CRE data is risk analysis. AI algorithms can quickly analyze market trends, historical data, economic conditions, environmental aspects and more to deliver information to stakeholders that promotes better-informed decisions about acquisitions and development.

Optimizing data management with AI

High-quality datasets are a necessity to not only operate your business efficiently but also take advantage of new AI technology. According to Forrester, data quality issues take up to 40% of a data analyst’s time. Solving issues including siloed data, duplicated data and lack of automation in workflows will position your company to get the best ROI from your AI (and all other) solutions.

As your business grows, data accumulates requiring scalable software and tools to manage that expansion. CRE stakeholders can use AI to pull data from reports more effectively and compile memorandums, due diligence documentation, comps and more. It can also classify and store documents to create an archive of historical data that can be revisited to make decisions. It can send alerts when document-related tasks are due and proactively report on issues and trends (such as an increase in tenant demand).

Yardi Voyager contains high-quality operational, customer and financial data, the kind that AI systems, particularly machine learning models, rely on to learn and make predictions. In the spring of 2024, we will be launching Yardi Voyager Virtuoso, which will enable AI and machine learning through the framework, leveraging the rich data stored in your environment. Yardi Virtuoso will further utilize platform agnostic LLMs, enabling us to use large data sets to make the most of any LLM, including ChatGPT, which is currently being tested in our framework.

Data governance, security and integrity are paramount, and as such, we have strict protocols to ensure the security of our AI framework through Yardi's cloud. Our goal for our AI platform is to augment our clients' efficiency and enhance their customers' journey and experience.

Making AI work for your business

As discussed above, CRE operators can take advantage of AI as a vital part of marketing, customer service, operational tasks including invoice processing, performance analytics and data management. Make sure your tech providers have a clear vision for implementing AI in the solutions you rely on to run your business, in addition to delivering new tools that enable greater possibilities.

As has always been true, companies that embrace technology will likely gain a competitive advantage. AI tools will help stakeholders and brokers optimize business processes and focus on what they do best and what no software solution can completely replace: engaging in human relationships and nurturing the best ROI possible for RE investments.

If you’re wondering about managing so much information, cloud data warehouses enable you to store massive amounts of data, support data transformation and let you do more on-demand, which places less of a burden on IT. And when it comes to your core business platform, the widely acknowledged best practice among CRE leaders is using a modern data stack fit for AI to deliver a seamless experience for all users both inside and outside of your organization.Technology is advancing quickly, so now is the right time to position your business to take advantage of the exciting opportunities made possible by AI. Yardi is aligned in leveraging AI with your best interests at heart – and there is a 40-year track record of delivering on impactful innovation focused on client outcomes.

Additional sources:

Generative AI Will Change Your Business. Here’s How to Adapt. (hbr.org)

AI in 2023: Tips & Trends (dataiku.com)

GPT-4 Released: What it Means for the Future of Your Business (forbes.com)

(forbes.com)

Data Performance Management Is Essential To Prove Data (Forrester)

Brian Sutherland,VP, Commercial Sales, Yardi As vice president for commercial real estate, Brian Sutherland is responsible for leading the US commercial sales and marketing organization. Additionally, heoversees sales, marketing and product strategies for Yardi's commercial real estate asset management, procurement, coworking and energy solutions. Before joining Yardi, he spent 15 years as founder and president of several start-up companies.

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