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Getting started with AI for Commercial Real Estate.  A Practical approach.

Written by Docugami | October 4, 2022 at 5:05 PM

Commercial Real Estate has been a 'people business.'  What's the best way to adapt to and secure the future?

Many have said that the commercial real estate industry is not and never will be ‘tech forward.’ As this line of reasoning goes, CRE is a hyper-localized industry that has always relied on face-to-face relationship building, handshakes, eye contact, in-person site visits and personal trust. With this mindset, technological change appears disruptive, difficult, expensive, and a low priority with uncertain ROI, especially given the need to focus on local market shifts.

Another camp says that the industry is at an inflection point with an intensifying need for technology, with the pandemic fundamentally altering the landscape for office space, retail, industrial, hospitality and medical environments. As this line of thinking goes, digital transformation is imperative and perhaps THE key competitive advantage available.

It’s likely that both viewpoints carry significant truth. So how can a commercial real estate brokerage or investor reap the benefits of technology and compete for the future, while minimizing disruption to business practices?

How can AI apply to Commercial Real Estate?

Artificial intelligence as a topic can be awe-inspiring, frightening, and confusing. From self-driving cars to facial recognition to algorithms that seem to know everything about us for advertising purposes, AI can feel a little overwhelming and hard to incorporate into your business.

But tapping into the power of AI for your business doesn't have to be intimidating. There's an emerging field of AI that some are calling ‘Boring AI’ – technology that does simple, non-threatening, but valuable work.

  • Reviewing lease agreements is complex, tedious, and difficult work, but somebody has to do it! How can we make it faster and more accurate, and free our people up to do higher value work with customers?

Similarly, AI doesn't have to be some mysterious black-box that replaces human knowledge and decision-making. Many AI experts now talk about the concept of AI systems with ‘Humans in the Loop,’ where the goal of developing perfect algorithms is deemphasized in favor of interactive systems with regular human feedback.

  • Human beings create and negotiate property agreements. No algorithm can understand all the factors and nuance that go into dozens or hundreds of leases. But a small amount of human feedback could make AI so much smarter and more useful. 

Earlier this summer, Stanford University hosted a conference with a theme that captures how many businesses want to take advantage of AI technologies -- AI in the Loop: Humans in Charge.’ In short, AI should be used to augment people’s capabilities and make their lives better, but actual human being should be in charge of decision-making.

  • A financial transaction like buying property or closing a lease should definitely have the people in charge, but maybe they can put AI to work in the diligence process?

So perhaps there IS a way to apply sophisticated artificial intelligence to the CRE industry that is simple and non-threatening? Perhaps there IS a way for CRE to take advantage of AI to augment all of the skills and knowledge of your professionals, while still keeping people in charge of decisions and providing valuable feedback to AI systems to make them more accurate and insightful?

 

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Steps to a practical approach:

1. Start with your documents.

The real estate industry runs on everyday documents that include essential data: listing agreements, lease agreements, purchase & sale agreements. These documents are all 'manually operated' today. Their important data requires reviewing them, word for word, often in a pdf scanned form, and sorting, sifting, exporting, copying, and pasting, to find and use the data. So, as you start to think about how technology could help your business, start by focusing on where your data starts: your documents.

2. Hire a consultant? Start a digital transformation project? Not required.

Ernst and Young outlines an imperative, that CRE firms must use technology to secure a future.

At Docugami, we show that you can get a big head start and competitive advantage by applying all three elements yourself:  "Boring AI," "Humans in the Loop," AND "AI in the Loop with Humans in Charge."

  • Why not just get assistance from easy-to-use AI, to turn those documents, every word, into accessible data?
  • What if you could start a diligence process on an investment property by simply uploading documents for analysis?
  • What if each week you could have the AI automatically prepare a spreadsheet for your team of the upcoming quarter’s property lease renewals, pricing and all the relevant data?

You can adopt and apply technology faster than your competitors, by keeping the plan simple and yet powerful.

3. Find and hire people with the skills to do an AI project? Not required.

Your existing team knows your properties, your contracts and their nuances. When you use Docugami, they don’t need to know AI. They can simply provide feedback to the AI on the provisions, the clauses, the terms, the similarities, the differences that matter. No big disruptive AI project required. No extensive training or new expertise required.

You don't need to hire a team of rocket scientists because Docugami provides the rocket science in a simple, intuitive way that integrates seamlessly with your existing tools like MS Word, Google Docs, Excel, Adobe, Sharepoint, Dropbox, Box, and many more.

4. Plan to put this rich source of data to good use.

Apply the data to urgent, time-sensitive needs, to grow and sustain your business:

  1. Plan far ahead for lease renewals
  2. Identify any potential legal risks/red flags or environmental concerns in your portfolios
  3. Pull the information needed for regulatory, accounting, audits and tax compliance
  4. Compare and contrast pricing across different types of properties, sectors, and locations
  5. Analyze all the document info that describes property value during the investment diligence process

The best of both CRE worlds. People + Accessible Tech.

Applying AI to your key documents is a practical way to gain competitive advantage. While it might seem daunting, it's actually quite easy to take some simple steps to start benefiting from powerful but easy-to-use AI technologies.  Combining the knowledge and relationships of your people with the power and efficiency of AI will make your team even stronger. So as the economy goes through inevitable swings and changes, your business can meet any challenge and seize every opportunity. 

 

Learn how Docugami’s breakthrough AI delivers value on Day One, unlocking critical business information from your documents.