Artificial intelligence (AI) has captivated the public’s attention over the past few decades and has appeared in literature, film, and cartoons, changing many facets of society.
However, the development of AI has also had an impact on a number of other markets, including commercial real estate, by providing chances to improve productivity, reduce costs, and increase profits—and this is just the beginning.
While back-of-the-house administrative applications are where AI is currently most commonly used, other sectors are starting to adopt other relevant and developing technologies.
A member of an Atlanta-based AI group and executive managing director at Cushman & Wakefield, Chris Taylor recently shared his predictions with Chicago Industrial Properties about the possible effects of AI on industrial owners and operators.
The main lesson? Although AI hasn’t yet been widely used for everyday tasks, it’s crucial to be ready to change when it does.
Chicago Industrial Properties:
What potential effects do you anticipate AI technology will have on the effectiveness and efficiency of IPM?
Scott Taylor Due to the fact that AI is still in its infancy, the majority of what we are currently observing focuses on back-of-house billing efficiency via robotic process automation (RPA/BOTS).
Illinois Real Estate Journal: Which particular duties or procedures within IPM do you believe can be improved upon or automated using artificial intelligence (AI)?
Taylor: I do see a moment in the not too distant future when AI will be able to abstract leases and help property managers with some regular customer service tasks. When a renter, for instance, emails about an HVAC issue, AI can aid by citing particular clauses in the lease that relate to accountability.
However, the majority of tenant interactions continue to be complicated and undoubtedly call for a personalized response and strong relationship, particularly in light of all the choices that must be made when a tenant’s lease is up for renewal, their AR balance, etc. No one solution fits all.
Journal of Illinois Real Estate: Is there a chance that using AI technology into IPM will present any difficulties or risks? If so, what solutions do you have in mind?
Taylor: The sharing of confidential customer information (leases) is our largest obstacle.
Journal of Illinois Real Estate: How do you see artificial intelligence (AI) influencing maintenance and facilities management techniques?
Taylor: PropTech is being developed, and it can help inform judgments about when repairs are necessary and how to anticipate repairs over a longer time horizon. For instance, we have technology that uses drones to assess the state of a parking lot and pinpoint any imminent repair needs.
Journal of Illinois Real Estate: What effect do you anticipate AI will have on tenant satisfaction and engagement?
Taylor: My understanding is that this is a tool to quicken the tenant request and resolution processes, but AI in no way replaces the need for property managers. There are far too many circumstances where decisions must be made based on experience.
Journal of Illinois Real Estate: What knowledge and abilities would IPM personnel need to gain or pick up to use AI technology effectively?
Taylor: Everyone needs to understand how to integrate systems, such as how to connect accounting and property inspection software.
How do you think AI will affect IPM’s decision-making procedures, such as lease negotiations or property appraisal, asks the Illinois Real Estate Journal?
Taylor: This won’t have much of an effect right away, in my opinion. The factors that influence pricing and lease negotiations are too complex at the market and geographic levels.
Journal of Illinois Real Estate: What variables might affect the timescale for the general implementation of AI technology in IPM, in your opinion?
Taylor: Five to ten years, with the key challenge being how we address problems with data sensitivity.