Over the last few decades, Artificial Intelligence (AI) has captured the collective imagination, and found its way into movies, literature and cartoons, transforming various aspects of society. But AI’s growth has impacted several other industries, too, including commercial real estate, by offering opportunities to enhance efficiency, cut expenses and boost revenues—yet it’s only just beginning.
While AI is primarily utilized now in back-of-the-house administrative applications, there are emerging and relevant technologies that are starting to be seen across various sectors.
Chris Taylor, executive managing director at Cushman & Wakefield, and a member of an Atlanta-based AI committee, recently shared with Chicago Industrial Properties his predictions regarding the potential effects of AI on industrial owners/operators.
The key takeaway? Though AI hasn’t yet been widely adopted for day-to-day functions, it’s important to be willing to adapt when the time comes.
Chicago Industrial Properties: How do you foresee AI technology affecting IPM in terms of efficiency and cost-effectiveness?
Chris Taylor: We are very early on with AI, and most of what we are seeing now focuses on back-of-house billing efficiencies with Robotic Process Automation (RPA/BOTS).
Illinois Real Estate Journal: What specific tasks or processes within IPM do you think can be enhanced or automated through the use of AI?
Taylor: I do see a time in the near future when AI will have the ability to abstract leases and assist property managers in some day-to-day customer service functions. For example, a tenant emails about an HVAC issue, and AI helps to cite specific portions of the tenant’s lease that are applicable to responsibility. However, most of tenant interactions remain nuanced and certainly require a personal response and solid relationship, especially within the context of all the decisions that come into play when a tenant is up for renewal, their AR balance, etc. There is no one size fits all.
Illinois Real Estate Journal: Are there any potential challenges or risks associated with integrating AI technology into IPM? If so, how do you propose addressing them?
Taylor: Our biggest hurdle revolves around sharing sensitive client data (leases).
Illinois Real Estate Journal: How do you envision AI technology improving maintenance and facility management practices?
Taylor: We are seeing PropTech being developed that can help drive decisions on when repairs are needed and how to forecast repairs over a longer-term hold. For example, we have technology that utilizes drones to evaluate a parking lot’s condition and identify immediate needs for repair.
Illinois Real Estate Journal: What impact do you think AI will have on tenant engagement and satisfaction?
Taylor: I see this as a tool to accelerate tenant request and resolution processes, but by no means will AI eliminate the role of property managers. There are too many situations requiring judgment calls that have to be made based on experience.
Illinois Real Estate Journal: What skills and expertise would IPM professionals need to develop or acquire to effectively utilize AI technology?
Taylor: We all need to learn how to integrate systems (i.e., how to get accounting systems talking to property inspection systems).
Illinois Real Estate Journal: How do you think AI will impact the decision-making process in IPM, such as lease negotiations or property valuation?
Taylor: I do not see this as impactful in the short term. There are too many nuances at the market- and location-level that drive valuation and lease negotiations.
Illinois Real Estate Journal: In your opinion, what is the timeline for widespread adoption of AI technology in IPM, and what factors might influence this timeline?
Taylor: Five to 10 years, with the main hurdle being how we solve data-sensitivity issues.