Top AI Real Estate Use Cases

Artificial intelligence has the potential to provide “tremendous value for real estate as financial services organizations undergo business transformation,” says a JLL report called Financial Services: 5 trends to expect in 2024.

“AI and generative AI were ranked among the top 3 technologies expected to have the greatest impact on real estate over the next three years by investors, developers and corporate occupiers,” they wrote, adding that 2022’s funding of AI-enabled proptech was $4 billion, or almost double that in 2021.

This could be misleading in two different ways. Last year brough heightened attention, and funding, to artificial intelligence in the form of generative AI and companies like OpenAI. The historical 2023 and coming 2024 levels of funding are probably much higher than in 2020

Going backward in time, AI has encompassed a growing and large body of technologies and techniques that started in the 1950s, so chances are good that there is broader use of mechanisms that came out of AI research and development than many people realize.

Much of the current hype is the focus on generative AI, but other uses are delivering significant returns. JLL mentions energy conservation in HVAC, but also in the list could be water conservation, improved strategic control for better cash cycle management, more efficient investment portfolio management, more responsive interaction with tenants, and more.

JLL mentioned four general use cases, each with representative applications:

• Investment management — valuation and transactions, compliance, and investment and capital planning
• Construction — construction project management and design, modeling, and planning
• Property operations — building energy and utility management
• Portfolio management — leasing and brokerage, market research, data analytics and benchmarking, and marketing

Interestingly, as more of the CRE takes up the use of AI to improve business performance, occupiers aren’t so enrapt. Even as 92% acknowledge “technology’s role in driving competitive advantage … fewer than 40% of occupiers consider their existing technology programs to be very successful.”

One reason is resistance over cyber and data security issues. There are difficulties and risks in providing technology in a secure way. Those renting properties want to ensure that nothing critical will slip away because of any laxness in systems. “Leading companies will need to shape an actionable technology strategy, build a resilient operating model, and drive new ways of working for successful real estate technology transformations,” JLL wrote.