How will AI affect the commercial real estate sector? – San Bernardino Sun

ChatGPT, the Open Source artificial intelligence model, broke into the mass market about two years ago. When Microsoft invested billions of dollars in this new technology, you knew it was a big deal.

You can’t talk about the future of commercial real estate without recognizing the enormous impact that artificial intelligence is already having. ChatGPT, OpenAI’s innovative model, burst onto the scene just two years ago, and its repercussions have been impossible to ignore. When Microsoft invested billions in OpenAI, it became clear that it wasn’t just another passing technology trend.

I wrote one of the paragraphs above. Can you guess which one? Exactly!

So, there is an example. Use AI to write long-form narratives: blogs, stories, property descriptions, case studies and the like.

But highlighting only this function would be to dramatically underestimate its capabilities.

Recently, our Lee & Associates office selected a new president. A committee was formed of which I was a member. We used artificial intelligence to create a job description and asked each candidate to prepare a business plan. These plans were poured into the engine and they were asked to compare and contrast each candidate based on their plans and the job description.

From the Chat, we created 10 interview questions and a scoring system based on each answer. Chat even chose those most likely to win the ratification vote. How did it go? You will ask yourself. Well, the candidate he selected was not the candidate who won by vote. Suffice it to say that we humans still reign.

To explore how AI will impact the eight key steps of brokerage, let’s take it step by step. AI isn’t just a buzzword: it’s a tool that can improve every phase of the process, making agents more efficient and effective while providing deeper insights. Here’s how:

1. Supply. AI excels at analyzing massive data sets, from public records to online listings, to identify properties or clients that align with specific criteria. Machine learning models can analyze market trends, demographic changes, and historical data to identify opportunities that agents might otherwise overlook. Tools like predictive analytics can even forecast areas ripe for development or investment.

2. Find. AI-powered platforms streamline the property search process by matching customer needs with available options. Imagine entering a set of requirements (location, size, zoning, budget) and having an AI return a personalized list of properties in seconds. AI-enhanced virtual tours can also give customers a more immersive understanding of spaces without setting foot on site.

3. Qualification. AI can automate the lead qualification process, saving agents time and energy. Chatbots and CRM integrations can interact with leads, ask key qualifying questions, and prioritize leads based on their likelihood of closing. Artificial intelligence tools also analyze credit worthiness, tenant history or business viability to ensure that potential clients meet the necessary criteria.

4. Control. Managing the flow of information and deadlines is essential. AI tools, like project management software, can keep deals organized, automate follow-ups, and provide reminders of critical deadlines. Natural language processing can even analyze communication patterns to detect when a deal might be at risk, giving agents the opportunity to correct course.

5. Execution. During the negotiation and documentation phase, AI can analyze lease terms, purchase agreements, and market comparisons to provide insight or identify red flags. Smart contracts, powered by AI and blockchain, can automate parts of the execution process, ensuring compliance and accuracy, while reducing time spent on back-and-forth negotiations.

6. Closing. AI can improve the closing process by streamlining workflows, automating document generation, and ensuring all compliance requirements are met. You can also track progress on escrows, title searches, and financing approvals, reducing the likelihood of delays. Digital signature platforms with AI integration further simplify the closing process.

7. Compensation. AI can help ensure that compensation arrangements are made accurately and fairly. AI-integrated systems can calculate commissions, track payments, and generate transparent reports for all parties involved. Additionally, predictive analytics could help agents model future compensation scenarios based on their deal portfolios.

8. Continuation. The work doesn’t stop once the deal is closed, and AI ensures that agents are top of mind with their customers. AI-powered automated follow-up systems can periodically check in with past clients, send personalized updates, or even signal when a client might be ready for another deal based on their activity patterns.

Allen C. Buchanan, SIOR, is a principal at Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714.564.7104.