This article first appeared in the April BISNOW Real Estate Newsletter in several markets nationwide
Whether you consider Artificial Intelligence (A.I.) the existential threat that will end the world, the innovation promising the greatest increases in human prosperity or something in between, it is difficult to argue that the impact of this technology on commercial real estate (CRE) and the broader economy will be insignificant.
Meet Your New Agent, Art. E. Fishell
Currently, electronic devices collect and store a lot of data with untapped potential. “Deep learning,” or the ability to learn without being explicitly programmed, allows them to leverage that information, revolutionizing CRE. The sector is a document-intensive one. Virtual piles of data have accumulated, now residing in remote data centers when before they filled filing cabinets. Mining the mountains of lease agreements, transaction histories and financial statements has previously proven too expensive to justify allocating the human and monetary capital required. An A.I. system, however, can comb through these quickly, yielding valuable findings.
Buyers find the capabilities of A.I.-powered search engines so great that they depend on brokers’ expertise less early in the process. A recently launched tool called CityBldr promises to do for CRE what Zillow did for residential, achieving in seconds what it takes land acquisition teams months to accomplish, according to Everyhome CEO Bryan Copley. The Seattle-based startup's product uses A.I. to find deals and estimate their return on investment, ranking land assemblages and properties based on their development potential. Brokers, on the other hand, are finding that A.I. lets them spend more time onsite with a client. Their consulting roles have been facilitated by increasingly sophisticated chatbots that can address the more menial tasks of booking appointments and responding to prospective buyers’ and tenants’ inquiries.
Other things to watch for include marketing campaigns tailored to individuals in ways that border on privacy infringements. Real estate portals may implement dating site algorithms to unite people with the physical space best suited to their needs and preferences. Sophisticated and accurate image categorization continues to be a boon to an industry so heavily reliant on pictures. As computers achieve artificial general intelligence, leads will become increasingly focused and data-informed, combining property availability with a buyer’s tendencies, income and feature preferences, for example.
Economy - Jobs Eliminated and Responsibilities Changed
As millions of workers, especially less skilled laborers, find themselves replaced by more efficient, less expensive and less error prone machines, many economists are predicting a huge spike in unemployment. A.I. Oxford University researchers Carl Benedikt Frey and Michael A. Osborne quantify this danger, asserting that 47 percent of total U.S. employment will be at risk in the next 10 to 20 years.
Bill Gates, Stephen Hawking and Elon Musk have all expressed apprehension at the prospect of a world in which machines can perform most tasks better than humans and have implored the scientific community and governments to check the progress of this potentially catastrophic technology. Lawmakers, wary that a tech-sated business landscape could take a while to adjust to accommodate those left jobless by A.I., are exploring educational programs fit to this digital era.
Optimists believe that with machines taking care of mundane tasks humans will be free to pursue more creative vocations. Many hope that the economy’s trajectory will follow technology’s exponential one, accelerated by A.I.
We may be approaching a time when machines will be able to outperform humans at almost any routine or analytical task, but property buying and selling contains an emotional element not solved solely by data analysis – at least, not yet.
The Human Element – What Machines Cannot Do
We have successfully programmed supercomputers to tackle a complex series of equations in fractions of seconds, a task that would take the most brilliant mathematician hours. We have had far less success imbuing devices with capacities that toddlers possess, the ability to correctly recognize a sketch of a cat, for example, which represents elementary symbolic reasoning.
Artificial Narrow Intelligence (ANI) comprises the vast majority of A.I. in the systems and applications we interact with each day. This software specializes; it does one well-defined thing extremely well. Thus, the jobs that are safest from obsolescence are those that require broad, abstract thought.
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The CBIZ Commercial Real Estate National Practice works strategically with property developers, owners, investors and managers to capitalize on the value of data to support tactical and operational decisions that minimize risk and maximize property/ portfolio value.