The investment environment hasn't been kind. Interest rates are elevated. Insurance costs keep climbing. Valuations remain depressed. Many experts have recommended a turn to NOI growth and operational excellence to generate investment returns, and operators are turning to AI tools to better achieve these metrics.
But to truly leverage AI, operators need to select AI tools that understand the business strategy and drive real performance outcomes. As Daniel Waas, VP of product marketing at AppFolio, puts it, "AI isn't the story. What you do with AI is the story."
AI Drives Operational Profitability
Commercial real estate owners are actively implementing AI tools to improve productivity and drive performance outcomes. For property operations, adoption is driven by a deep necessity to drive income growth despite growing costs. "We see a lot of continued economic uncertainty," says Waas, adding that operators are seeing flat rents, rising vacancies, increased fraud and regulatory challenges. "There is a lot of pressure on operators to perform and have a stronger NOI."
Despite the challenges, AppFolio's research shows that some operators s are able to outperform the market. The top 25% of operators are seeing 2.4-times higher profitability than their colleagues. "There is a distinct group that is pulling ahead," says Waas. "A big reason for that is AI. AI has been an accelerator of increased performance." The difference is not just which tools they use. It is what they are using those tools to do.
AI alone isn't going to do it. The mindset has to shift, too. "We are moving from a task-centric approach to an outcome-centric view," says Waas. "AI is shifting from managing the property to being a performance manager." That is a fundamentally different ask — and it changes which tools are worth choosing.
The Most Powerful AI Already Knows Your Business
Shifting the mindset requires selecting the right toolset. Operators should look for a unified experience — one platform, one login, whether they are at a desk, on-site, or working within AI tools, like Claude. "The integration makes this a platform and not a feature set," says Kyle Triplett, chief product officer at AppFolio. "The sum of these systems lets our customers drive profitability from a single integrated platform."
The AppFolio Performance Platform was built to deliver exactly that. It closes the Property Performance Gap by integrating the Systems of Growth, Action, and Record — connecting governance, business context, domain logic, and the data that runs the business. General-purpose AI has to be taught how real estate works. AppFolio already knows. "Horizontal AI needs to be taught in our industry, " says Triplett, "But AppFolio already knows it."
It is more than just the industry. The Performance Platform knows the portfolio or property's individual business, including strategy, policies, knowledge base, and performance goals to deliver the most valuable and tailored insights. "Every conversation can start with the program already knowing about the customer's business," says Triplett.
That is what separates AI that changes your business from AI that just keeps it running. Not a task manager. A performance driver. That is the shift worth making.
For more insights and thought leadership from AppFolio, click here.
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