AI in Real Estate, Beyond ChatGPT & Midjourney

Artificial intelligence has dominated tech headlines this year, and the Proptech world is no exception. With image-generation tools like Midjourney and Dalle and chatbots like ChatGPT, high-quality AI is now democratized in a way it never was before. These consumer tools are game-changing technologies in their own right, but the entire conversion shouldn’t focus on these most obvious AI platforms and their ability to rapidly create text and image collateral. So what else should you know about AI in real estate?

Where AI is Impacting Real Estate

AI is impacting every corner of real estate. Even if the core value proposition of a particular tech platform isn’t AI, it can still add ancillary value. Consider the example of a property management tech platform where AI can save managers time by offering chatbot responses to potential residents. According to JLL, $4 billion went to AI-powered Proptech in 2022, from tech to streamline floor plan design to robotics. Here’s a rundown of some of the modalities AI beyond the usual suspects of ChatGPT and Midjourney is impacting real estate teams.

1) AI for data analysis

Data analysis is a huge category, and every professional whether analyzing a potential investment or ongoing asset management has an inherent sense of how it can impact their workflows. Not only can AI help make decisions based on large datasets, it also powers other tools like computer vision and natural language processing, helping teams understand a wider range of data points than just the traditional property investment and operations data.

In investment, AI is helping acquisition teams process large datasets and provide investment decision support beyond the DCF. It also helps property professionals assess the quality of buildings by using computer vision to identify the physical condition of the property’s exterior. In this way, computer vision is a crucial part of a growing number of tech providers building Automated Valuation Model (AVM) tools. One real estate company realized a 5% increase in valuation accuracy due to their deployment of computer vision, according to the National Association of Realtors.

Many AI tools allow users to ingest data from all sorts of sources. By analyzing footfall data, demographic trends, and other information sources, AI is also helping companies make leasing and location decisions. AI tools help retailers understand trends in consumer behaviour, traffic patterns, and where to place stores to make the most sales. These same tools can be useful for corporate occupiers planning the next office location.

2) AI for communication

Particular touchpoints here include leasing, investor relations, new property prospecting, and helping residents with maintenance and other property issues. Generative AI tools, the same type as ChatGPT, can be embedded on web pages or offered natively via an app and can selectively send users to human contact points, email forms, or other materials as applicable.

Like other use cases, there is a great potential for misuse of AI tools when it comes to communication applications. The COO and president of Sports Illustrated’s publisher were terminated after it was reported that the publication had been releasing AI-written content without disclosure, under fictitious bylines. Do not wind up in this situation.

3) AI for process automation

Repetitive tasks are common across every area of the real estate industry. Running due diligence, screening potential renters, handling maintenance requests and similar tasks are big-time sinks for teams. Not only are they time-consuming, but the cost of failure in these areas ranges from dissatisfied residents to poor investment decisions. The work might be boring, but the costs are high.

This is another core area where AI adds value. It can handle first-level questions and communication with prospective renters, investors, and property transaction partners, proactively assign tasks before preventive maintenance turns into “fix it quick before we get complaints” maintenance, handle substantial parts of a property company’s bookkeeping, and optimize the performance of building HVAC systems based on energy cost and use patterns throughout the day.

4) Robotics

Finally, robotics is another area to pay attention to. Powered by AI, which allows robots to move through complex landscapes and perform various actions in the right places, robotics are performing a range of roles associated with construction and maintenance. They are helping translate digital building plans into the real world by printing directly onto concrete, enabling greater utility in micro-units by offering furniture that can shift its form and move within a room, and are taking over jobs like window cleaning. Robotics are also changing the nature of the delivery business for some restaurant operators, with autonomous delivery bots now a common sight in many cities such as Los Angeles and Tucson, AZ.

How to Conceptualize AI in Real Estate

Professionals looking to maximize their use of AI should consider what repetitive tasks and communication inefficiencies they face, and where in the business they feel like they have a hunch but need some data to back it up. These are all top-flight implementation areas for AI.

AI tools have a wide range of applications within real estate from project planning to construction through investment and management. In the future, professionals should treat AI as a thread that runs through many different processes and responsibilities, not a unique tech of its own. Since AI powers so many tech tools and augments or extends others, the future of real estate technology will be inextricably linked to artificial intelligence, not an either/or proposition where AI lives in its own conceptual box.

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