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    The State of
    Commercial Real Estate AI

    future of commercial real estate AI

    Today's best real estate professionals are looking for tomorrow’s AI technology

    The commercial real estate industry is growing in 2022. While there are many reasons for the boom, part of the growth is due to the adoption of new technology by real estate teams.

    Some of the latest, exciting new technology allows teams to leverage AI to add efficiencies to the project delivery process. Smarter, more-informed decision-making is a better way to proactively approach tackling project risks.

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    45% of commercial real estate executives plan to increase their investments in AI and other technologies in the next 12 months.

    This means two things for you: 
     
    1. If you're not yet looking into AI, you should be. Now is the time! 
     
    2. If you’ve decided AI is simply a buzzword, there’s a good chance you’ll eventually begin to lose financial partners and investors to your competition. Development teams that can prove they are using modern tools that allow them to get to more predictable outcomes and higher returns when completing projects will soon become the norm, and those teams that cling to traditional methods will slowly fall behind. Now is your chance to be a part of the group that’s making use of today’s best AI technology.
    What is commercial real estate AI?

    What is AI?

    Before we can go any further, allow us to briefly introduce what AI is. AI stands for Artificial Intelligence. We now have “smart” machines capable of performing tasks that typically require human intelligence. It automates and eliminates manual tasks, reduces human errors, and serves up data in real-time, so real estate teams can focus more of their time on strategy and make intelligent, data-backed decisions.
     
    Developers, however, have been slow to adopt any technology that may disrupt their current processes. In order to meet your goals and grow right along with the commercial real estate industry, you need to be open to these emerging tools. Anything that allows you to work more efficiently is worth a second glance.

    In this ebook, we’ll talk about the current state of AI for real estate teams, as well as how you can leverage it for your success.

    Sections

    The Emergence of AI Learn More
    Where AI is Being Used in Commercial Real Estate Learn More
    How AI Can Help CRE Teams Make Better Decisions Learn More
    Embrace the Future of Commercial Real Estate AI Learn More

    The Emergence of AI

    Changing technology can seem daunting. It’s easy to see something like AI and feel a bit of apprehension. Don’t think of AI as the scary Skynet in the Terminator movies. You probably already use AI in other areas of your everyday life! Siri, Alexa and other smart assistants are AI. Self-driving cars and email spam filters are too.
    commercial real estate AI buildings

    It’s understandable to want to do business the way you’ve always been successful doing it, but innovation is always imminent. In fact, chances are good that you’re already working every day with technology you didn’t have at the start of your career or even a few years ago. You wouldn’t dream of working without a cellphone or wi-fi access now.

    It’s only a matter of time before
    AI feels the same way.

    A couple of ways financial institutions use AI is by combing through past data for risk assessment when considering loan and credit card eligibility. AI is also helping the industry combat fraud. AI serves as a detection warning system to immediately raise a red flag for suspicious transactions.
    It was only a matter of time for it to be leveraged by commercial real estate. Remember, as a real estate team we don’t need to completely understand everything about how AI works.

    We simply need to understand how to apply it.

    There is a growing number of commercial real estate professionals who are using more advanced AI technology. In the next section, we’ll break this down further in order to show you exactly how AI can impact your daily workload.

    Where AI is Being Used in Commercial Real Estate Right Now

    Let’s dig further into how commercial real estate professionals are using AI to see how it’s helping add efficiencies across the industry.

    commercial real estate brokers

    Brokers

    Brokers are using AI to find more and better-suited properties for their clients. AI has become an essential tool for them to compile information and compare data. As a simple example, a seller's broker may use AI to determine the market values of their clients' properties. A buyer’s broker can better conduct negotiations when they have AI at their disposal to give them up-to-date market information. This makes it incredibly easy to better match properties with buyers and sellers.
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    Property Managers

    Property managers are using AI in multiple ways to maintain their properties. Everything from adjusting energy use to identifying repair needs can be made easier through the right AI software. Let’s say in a large multifamily property, one unit’s electric bill is significantly higher than the rest. While a human may miss this anomaly, AI will notice the red flag and realize a problem that needs attending to.
    commercial real estate investors

    Investors

    Is now the right time to invest? Will the market dip or is it rising? How long will this trend last? Similar to the financial industry, AI is great for allowing investors within the commercial real estate sphere to make savvy business decisions. Investors are using AI for financial loan modeling, eliminating data entry and manual analysis, and predictive modeling on portfolio performance. All of this serves to help with project returns.
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    Marketing, Sales, and Advertising

    Teams that handle marketing and sales are using AI to analyze data on their potential investors and development opportunities. The benefits of this insider information to a marketer are invaluable! With this smart data, a marketing team is able to serve up personalized ads and messages to investors- speaking to the right people, with the right message, at the right time.
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    Leasing Managers

    A leasing manager’s plate is always full, so it’s no wonder these professionals have leaned so heavily into AI for relief. Leasing managers and firms are now using AI to monitor rental trends, adjust rates automatically, collect rent, and set lease expiration dates.
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    Accounting

    If there’s anywhere you want to eliminate human error, it’s in accounting. Whether you have an accounting department, one accountant, or must handle a majority of the accounting tasks on your own, this is one area that is made particularly easier through the use of the right AI technology.
     
    AI helps automate repetitive tasks like reconciling accounts, inputting data, sorting transactions and more. A person manually entering numbers may make a mistake, adding an extra zero or entering the same item twice. Your trusted AI software can match data from scanned receipts and ensure accuracy.
    Any professional who regularly works with data, whether it be deciding to invest in one property over another, selecting a vendor, or deciding if now is the right time to move capital from savings into an investment, can put AI to work to see added efficiency and better results from their work.

    How AI Can Help Commercial Real Estate Teams Make Better Decisions

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    Eliminate Manual Tasks

    If you feel like you don’t have enough time in the day for everything you need to do, you’re not alone. That’s why the fact that AI is able to eliminate many manual tasks is one of the reasons it’s booming in popularity. AI can automate 80% of manual administrative work, 70% of data processing, and 64% of data collection tasks. You’re able to focus on high-value tasks while the software handles the rest.

    80%  Manual Administrative Work

    70%  Data Processing

    64%  Data Collection Tasks

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    AI-driven technology can automatically extract data from email-based workflows, eliminating the need to manually enter data into spreadsheets. Your data only needs to be imported once. Then, it’s organized into the correct fields and easily accessible to anyone on your team. With AI, you aren’t just migrating spreadsheets to the cloud, but actually automating the administrative work that can bog project teams down, saving your team time as well as reducing the possibility of human errors.
     
    It’s important to note that AI will not eliminate jobs. Rather, it eliminates time wasted on low-value work and helps the entire team focus on the strategic tasks that lead projects to come in before the deadline and under budget.

    Evaluate and Leverage Data

    AI can leverage data in order to make predictive decisions throughout the development process.

    Let’s use an example of choosing a vendor for one of your construction projects. Most commercial real estate projects exceed their budgets and go beyond their timelines. A recent survey from IDC revealed that 75% of owners were over their planned budgets, while 77% were late. AI is able to look at past data, like which vendors issue the most change orders, slowing your projects down and causing budgets to veer off course. In this example, you can pull vendor data from projects across your entire portfolio, compare performance and costs, and make an informed decision instead of just reusing the same group you’ve grown comfortable interfacing with.

    75%  Over Planned Budget

    77%  Late Project Completion

    By leveraging automation to forecast costs, commercial real estate teams can make more informed project decisions that lead to desirable outcomes for your firm and investors.
     
    All of this is done with speed! AI is able to index all project information, so your team can easily find the data they’re looking for to make informed decisions. If you need an answer to a question immediately, you want AI technology on your side.
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    Forecast and Reduce Risks

    According to industry experts, 70% of commercial real estate project delays happen before the ground breaks!
     
    This doesn’t have to happen to your upcoming project though. You can use AI to find patterns in past projects and anticipate challenges on a new project.
     
    A commercial real estate team that adopts this kind of technology can reduce the time it takes to run a real estate project by 30 40%, ensuring every project is on time and comes within budget.
     
    You may be wondering how AI is able to forecast and reduce risks so efficiently. It does so in a variety of ways. One example of this would be by collecting and indexing vendor information, meaning you can compare rates and mitigate risks from using unreliable vendors.
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    Automate Key Reporting

    Anytime a task is automated, you’re going to have more reliable key reporting. AI doesn’t have the risk of human error that members on your team (or you!) do.
     
    AI technology can collect and process data to standardize reporting and measurements, as well as produce more consistency and transparency.
     
    You will be able to take advantage of reporting templates and customization options built based on industry standards, then populate these reports based on the data within your system. This can be anything from monthly draw requests, executive schedule summary, risk register, vendor tracking report, and beyond.

    Draw from Actionable Insights

    AI technology combs through your project data and pulls from industry best practices to suggest what next steps you need to take in order to bring your project in effectively.
     
    The technology can flag when there are opportunities for budget savings. For example, if one budget line is trending over, you’ll be alerted so that you can work to cut costs on other areas
    of the project and keep the overall project budget intact.

    Embrace the Future of Commercial Real Estate Technology

    There is exciting momentum building around AI, and you don’t want to miss out the opportunity to use it to your advantage and be an industry leader.
     
    If you’re ready to put the amazing capabilities of AI to use for you and your commercial real estate team, we’re here to help you.
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    Current technology is solving big real estate challenges.

    The tools are not only reinventing the way professionals perform their jobs, but they are also transforming the commercial real estate industry as a whole, by: 
     
    • Creating more opportunities
    • Driving efficiencies
    • Mitigating risks
    • Streamlining the process
    • Generating better outcomes
    • Eliminating mistakes
    • Saving money, effort and time
    • Decreasing overhead costs
    • Finishing projects on time and on budget
    • Allowing teams to focus on more important tasks
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    Real Estate Intelligence is just the latest innovation in commercial real estate.

    Northspyre, a cloud-based intelligence platform, is making a major impact on the way projects are delivered across the industry. The platform helps real estate developers and real estate project teams use data, automation, and artificial intelligence to get easier, more predictable outcomes on complex projects.

    Make informed, strategic decisions to achieve more predictable outcomes.

    As innovative technology like Northspyre continues to evolve and solve commercial real estate challenges, it will only further modernize and revolutionize the commercial real estate industry

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