The commercial real estate industry is getting bombarded with new tech platforms that use machine learning, predictive analytics and artificial intelligence. The supply of new software claiming to use AI to underwrite real estate transactions appears to be never-ending. With all of the headlines, you might say to yourself, "Wait a second. I underwrite real estate transactions — are these robots going to take my job?"
It’s important to first understand what the technological advances are, and then examine how they can be used in commercial real estate. AI enables computers to replicate or mimic human behavior, and it's used to automate tedious processes like data collection. Machine learning utilizes statistics to enable machines so that algorithms and other software can improve experiences or outputs, and it's used to analyze the data that’s been collected. Predictive analytics are used to make predictions about future events, and they can be used for projections on rent and expenses.
Consider the following questions to determine which of your own workflows can be executed by new real estate technologies.
1. Do you spend more time looking for data or leveraging relationships to get data?
Any task that involves downloading or copying and pasting data from a website can be automated. It’s only a matter of time before nearly all repetitive tasks will be automated. Machines are much faster and more accurate than we are at these kinds of tedious activities. If the bulk of your work consists of acquiring and organizing data, AI will eventually replace those elements of your work.
Relationships with brokers, managers, consultants and other industry professionals who continually survey the market for data are still very valuable. These relationships provide original source data, or data that isn't available anywhere online. If you have relationships with these professionals, and they are willing to share their proprietary information, your job is a lot less likely to be “hired” by software.
Pro tip: Relationships are really what matters here, not just making calls. There are companies out there perfecting technology that will ultimately automate market survey calls to property managers. Seriously, AI is within striking distance of replacing human beings on cold calls, which makes real relationships more valuable than ever.
2. Do you simply collect data, or do you also know how to analyze it?
Even if you have strong relationships in the industry and a good pipeline of proprietary data, the analysis portion of your job can be made more efficient with artificial intelligence. Boots-on-the-ground knowledge of specific markets, unique tax rules, city ordinances and other industry information that isn’t easily synthesized online will insulate your analysis from being replaced by software. Instead of spending an entire workday producing one market survey, you can utilize software to increase your output by leaving your job to be the editor and to add your local knowledge to the software’s analysis.
3. Can you creatively get deals done?
As unprecedented liquidity is added to the real estate market through the adoption of technology, trading buildings will be just like trading stock. All the operating metrics and analyst ratings will be public knowledge, due diligence will be streamlined and shares of buildings, rather than entire buildings, will be traded on exchanges. Now, this won’t happen overnight, but it's coming. How can real estate professionals remain relevant with the current asymmetry of information in the industry? Creatively getting deals done. An agile, technology-enabled professional who isn’t stuck in the “this is how business is done” mentality will be poised to handle the oncoming waves of disruption.
I don't mean to cause alarm, but rather to point out where technology can be employed and how you as a real estate professional can reimagine the scope of your job. Instead of falling behind and being replaced by artificial intelligence, future-proof your job to include more tasks and relationships that a computer can’t replicate while leveraging new technology to increase your productivity.