OpenAI launched ChatGPT in November of 2022, and the technology is already having an impact on the real estate industry, with developers eyeing real estate-focused tools for their potential to automate workflows, improve the bid request process, and increase returns across portfolios.
If you’ve somehow managed to miss the hype, ChatGPT is an AI chatbot that uses Natural Language Processing to engage in realistic conversations with humans and generate written articles, stories, or computer code. The tool can answer questions, conduct conversations, and in some instances, deliver detailed responses to questions. ChatGPT’s dialogue format makes it possible for the technology to answer follow-up questions, admit mistakes, challenge incorrect premises, and reject inappropriate responses.
The Harvard Business review noted business leaders who understand the significance of ChatGPT and similar AI technology, and put it to effective use early on, will be at a significant advantage. For real estate developers looking to become leaders in the industry, understanding AI’s growing role in the lifecycle of a development project may be vital to success.
How ChatGPT Is Shaping The Real Estate Industry
ChatGPT has already presented interesting use cases across the real estate industry, with the technology’s ability to produce written content expediting key tasks for development teams, including the creation of leases, written notices, brochures, or other marketing materials.
In one example, a commercial real estate equity fund manager used ChatGPT to draft a commercial lease with a 1% annual bump in compliance with Indiana state and local laws. The final document still required additional edits, but the user was able to cut hours from the drafting process, making the technology an undeniable time and cost-saving measure.
AI is also impacting real estate development on a larger scale. In the data center sector, which remains among the top-performing commercial real estate asset classes, AI continues to drive demand for facility development. The specific infrastructure for AI data centers will differ from the facilities built in the past, as artificial intelligence requires faster, more powerful server capability. As a result, data center developers are redesigning buildings in anticipation of AI demand. In another shift, developers are building more often in decentralized geographic areas with lower costs and increased access to renewable electricity sources.
On the project management level, ChatGPT assists with a variety of tasks for real estate professionals. Andres Asion, a broker in Miami, told CNN he uses ChatGPT to help write legal documents, including emails with liability concerns, legally binding addendums, and other documentation. The technology is also being used to compare real estate market rates, improve chatbot experience for clients or tenants, and seek out targeted information about housing laws or zoning regulations. As a result, real estate stakeholders will be able to automate time-consuming menial tasks and increase overall productivity.
Developers should also keep an eye on where ChatGPT is headed, as AI-powered technology is poised to change the way teams request bids and source vendors throughout a project’s lifecycle.
How ChatGPT Real Estate-Focused Tools Can Help Developers
ChatGPT’s API is empowering companies in the real estate technology field to build their own AI tools, designed with developers’ unique goals in mind. Northspyre is working on an AI tool that will allow developers to simplify the vendor selection process, lower costs, and increase returns on investment.
Northspyre’s upcoming AI-driven tool will assist development teams in a number of key ways, having a positive impact on projects as early as the pre-development stage. Here’s what users can look forward to:
- Developers will be able to use a predictive algorithm to leverage real estate market data and vendor context to predict which vendors can bid lower than the current expected budget, potentially saving teams millions of dollars.
- AI will also facilitate specific budget line analysis to remove the guesswork from the procurement process. Developers will be able to click in on individual budget lines, revealing suggested vendors and what savings can be expected by bidding out aspects of your project.
- Northspyre will also provide value to development teams through a vast vendor marketplace, tapping into a network of over 28,000 vendors who have successfully worked on projects totaling over $125 billion.
- The system will also offer vendor recommendations from companies who have successfully used Northspyre to launch projects, ensuring development teams have access to trusted and successful vendors vetted by other real estate teams.
- Developers will also be able to look at projected procurement savings, seeing the dollar value of predicted savings before construction on a project even begins.
- AI language training models will be able to identify and flag scope gaps in incoming proposals submitted by vendors, preventing surprises further along in the development process.
- The ability to eliminate scope gaps and change orders will be a major benefit to development teams, preventing potential issues before they happen and saving millions of dollars.
- AI-enhanced bid leveling will allow developers to seamlessly level bids and eliminate misses in evaluations for both soft-cost vendors and hard-cost items. Northspyre will further simplify the process, identifying key line items where vendors can save your team money and invite vendors to bid directly on aspects of the project.
ChatGPT’s current use cases for real estate professionals are only the beginning of AI’s potential in the industry. Northspyre’s upcoming AI-powered tool will make the technology a must-have for real estate developers looking to simplify the vendor selection and bidding process, lower costs, and increase returns.
Is the Real Estate Industry Ready?
The real estate industry can be slow to adopt new technology, and many teams continue to rely on error-prone, ad-hoc spreadsheets for project management. The advent of modern real estate development software is already reshaping outdated industry practices for the better, empowering developers to leverage automation and analytics to make proactive and data-driven decisions.
AI-powered real estate technology will be able to integrate seamlessly with the development process, making the technology accessible and intuitive for development teams. AI tools have the potential to provide value as early as pre-development, helping your team before the loan to fully understand the risks and rewards, saving both time and money. Quick and simple executive reporting powered by AI will also be able to highlight ways to save money, ensuring your team is doing everything possible to lower costs throughout the project lifecycle.
Northspyre is already enhancing collaboration between developers and key stakeholders across portfolios and increasing returns for development teams, and soon, new AI-driven features will further boost the platform’s functionality. Developers will be able to use the new tool to ensure teams don’t overspend on vendors for upcoming projects, making the platform an all-in-one command center to lower costs, increase returns, and simplify cost-effective vendor selection.
Looking to learn more about AI in commercial real estate? Download the State of Commercial Real Estate AI to get more information about this fascinating new technology.
