AI in real estate: Will CRE lead the way?
By Kevin Hawkins with Korey Hawkins | Vol. 2 Post 44
One real estate tech truism that has endured since I’ve been in the business is that the most advanced technology gets adopted in the Commercial Real Estate industry well before residential real estate. Often, the determining factor is the cost of the investment, but also true is that the newest tech can have a greater impact in CRE.
Sensors, IoT and IoE, digital twins all made more money in commercial real estate, despite being heavily marketed to residential. A tangential example of how CRE seizes an opportunity is the recent acquisition of LiveEasy (formerly MoveEasy). AppFolio, a property management software firm catering to both CRE and residential sectors, saw how LiveEasy fit into helping the 8.3 million rental units on their platform as justification for the $80 million purchase price.
Commercial real estate firm JLL (Jones Lang LaSalle) does a superior job of framing the AI conversation online under the heading, “Artificial Intelligence: Real Estate Revolution or Evolution.”
JLL’s dive into the CRE AI space is chalked full of interesting observations, including:
- AI is seen as a game changer by real estate professionals, but an understanding of its capabilities is still low.
- There are now technological solutions for almost every aspect of real estate functions, including investment management, design and construction, building and facility operations, and portfolio management. A solid foundation has been laid for AI integration.
- Anxiety around such change is not new. In 1589, Queen Elizabeth of England refused to grant the inventor of the mechanical knitting machine a patent out of fear that it would put knitters out of work.
- 85% of employment growth in the U.S. over the last 80 years is explained by the technology-driven creation of new positions.
- The birth of the ‘real intelligent building’ is imminent. AI-compliant infrastructure will become a default, just as internet connections are a default feature of current buildings. AI will also help deliver net-zero buildings with high sustainability performance.
- AI companies and investments have been observed to cluster around established tech markets. Going forward, growth is likely to be concentrated in locations where AI talent is available, namely tech hubs, innovation centers, and universities.
- 42% of AI companies are concentrated in the San Francisco Bay Area, followed by Boston, Seattle, and New York.
- Only 37% of AI companies are based in the US.
JLL’s bottom line: “It is crucial for real estate investors, developers, and corporate occupiers to stay informed and strategic, considering how to leverage the power of AI to support your business objectives and how to do it in a responsible and ethical way.”
We believe the same is true for real estate agents, so share our free REAL AI subscription link with a friend or two – here. (-Kevin)
SOURCE: The original post appeared on REAL AI from the WAV Group: https://www.wavgroup.com/2024/11/01/real-ai-will-cre-lead/
