Digital transformation as a concept incorporates advances in technology and how these are integrating into and changing all aspects of our work and personal lives. With commercial real estate (CRE), digital is truly transformational and CRE professionals and companies are grappling with the myriad ways that it is upending established processes.
This is the thinking behind a series of themed blogs, looking at the emerging technologies that have a bearing property specifically –right from construction all the way to property management. This is the second blog in the series and will delve into artificial intelligence (AI) in the context of CRE.
Understanding “intelligence”AI is essentially machines and computer systems simulating “thinking” –not just recording and storing information, but analyzing that info and responding to it. This is built on a base of machine learning too, in which machines are “taught” what to search for and what kind of responses are required. A practical example is a machine that is “taught” to recognize an object usinga (large) database of photos. Another common type isa chatbot,a little piece of software –that has “learned” to recognize what is being asked, and has a system for deciding what info to provide in response. Siri is AI-powered too.There are plenty of other examples and nuances, but those are typical examples that most people have encountered.
Smart or intelligent?For context, in the first blog in this series,we introduced the idea of “smart things” or the Internet of Things (IoT). A boiler that can be controlledremotely is “smart”. If that system dynamically controls itself, however, and produces insights into energy consumptioncorrelated with use and weather patterns, then it’s crossed into AI territory. According to Analytics Insight, AI has even been used to independently transact. Specifically, a “soon to market” algorithm that analyzed “large sums of data that included potential economic value, KPIs, property characteristics, and risk factors” selected and completed a property transaction, purchasing two buildings for $26 million.
Customer relationship management(CRM) and salesThe chatbot example mentioned above is one way in which AI can be used to manage and nurture your relationships with existing and potential clients. With both residential and commercial letting, a chatbot is a great early engagement tool as it can answer simple questions and even make appointments for viewings or meetings. Not all chatbots are created equally, some simply are more capable than others, so be sure you understand what you’re buying before signing on the dotted line for implementation.
In the same vein, not all CRM packages have AI built into them, but as companies glean and store more customer info through their engagement with people, AI tools in CRMare expected to be more affordable and more mainstream. This includes things like lead qualification, credit memo creation, and sentiment analysis, where the system isn’t just capturing information but transforming it into useful and actionable insights.
It is precisely this –insight –where we see AI really shine, and why so many companies are investing in forms of AI on-premises and via the cloud. For example, AI tools can turn mounds of data into performance analytics for your properties. Combined with market conditions data, this can go from deep understanding to farforesight, through predictive analytics. Furthermore, it is this kind of insight that many believe is needed, firstly to bolster post-pandemic recovery, but also to take CRE to the next level as a sector.