The artificial intelligence (AI) era in commercial real estate (CRE) is here, and the technology is transforming everything from leasing and property management to investing and risk mitigation. The growth of AI is even creating new market demand. In response, 72% of real estate property owners and investors report investing in or planning to invest in AI-enabled tools and technology.

The most common application of AI is streamlining manual and routine tasks, which helps commercial real estate teams enhance operational efficiencies and accuracy. However, the potential of AI in the commercial real estate sector extends well beyond automation. As the technology continues to evolve, it offers innovative opportunities in five key areas.

1. AI-empowered Investment Strategies

AI offers a powerful tool that CRE investors can use to support decision-making and portfolio management. AI-enabled platforms are capable of processing vast amounts of historical data, market trends and economic indicators to assist investors with expanded predictive modeling capabilities. As a result, investors can forecast potential returns more quickly and with greater accuracy, identify investment opportunities and optimize their portfolios.

AI also streamlines time-consuming processes, such as data input, financial loan modeling and deal analysis. AI-automated systems can quickly generate custom financial models for specific projects, eliminating the need for more general models and enhancing data-driven decision-making. With the efficiencies gained, CRE investors can focus on strategy and risk management.

2. Enhanced Risk Mitigation

AI’s ability to harness data analytics and machine learning allows it to identify and assess a wide range of risks that were previously difficult to quantify or predict. From market volatility and tenant defaults to environmental hazards and equipment failures, AI-powered tools provide a comprehensive view of potential threats to CRE property investments.

AI can enhance financial risk management by automating assessments of cash flows, loan terms and market conditions related to individual properties or entire portfolios. The deep, real-time analysis gives investors new insights to help them make decisions that protect their assets and optimize returns.

3. Streamlined Accounting Processes

The automation of routine tasks, combined with advanced analytical capabilities, enables AI-powered tools that can fundamentally change how CRE firms handle day-to-day financial transactions and long-term financial planning. For example, AI technology can read and understand invoices, allocate them to the correct properties and process them with minimal human intervention, reducing the risk of errors and accelerating processing times.

Beyond automation, AI's ability to analyze vast amounts of financial data provides CRE firms with valuable insights. In turn, firms enhance their ability to identify cost-saving opportunities, flag potentially fraudulent activities and make data-driven decisions.

4. Optimized Leasing & Property Management

AI also has the potential to reshape CRE leasing and property management with a combination of machine learning and data analytics. For commercial leasing, AI tools are streamlining lead management and tenant screening through the analysis of extensive datasets. AI algorithms can identify the most promising leads, minimize human bias and improve decision-making throughout the leasing process.

From a client experience perspective, AI-powered tenant platforms simplify routine interactions, provide instant responses to inquiries and prioritize maintenance requests. The AI-infused interactions help to boost tenant satisfaction and free up property managers to concentrate on the most important tasks. AI is also at the forefront of smart building management, with tools available to continuously monitor building systems, spot potential maintenance issues, optimize energy usage and minimize operational downtime.

5. AI-fueled Market Opportunities

Along with the efficiencies and enhanced capabilities AI offers, the emerging technology also provides new market opportunities for CRE investors and property owners. Strategic “AI clusters” (or geographically concentrated AI-focused companies) and research institutions have the potential to reshape commercial real estate demand.

AI clusters, often positioned near top academic institutions, are forming inside and outside established tech centers. CRE investors in these areas see an increased demand for flexible, adaptive and tech-enabled commercial properties, including coworking spaces.

As AI continues to evolve, its application and influence in commercial real estate will become increasingly significant. The dedicated commercial real estate and cybersecurity experts at CBIZ can help you navigate AI opportunities and identify security and compliance risks associated with AI utilization.

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