Artificial Intelligence: An Intern in the Palm of Your Hand

Author: Bo Barron, CCIM

Bo Barron, CCIM, is CEO/managing director of Barron Commercial Group, a successful brokerage firm in Owensboro, Ky. He also owns and manages a small family-owned commercial real estate portfolio. A third generation commercial real estate practitioner, Barron brings his wealth of experience and expertise as a member of the CCIM Institute faculty, which he joined in 2019.

Utilizing AI in Commercial Real Estate to Better Serve Investors, Clients and Other Professionals

There’s no doubt AI (artificial intelligence) is a hot topic, and in commercial real estate, it can be extremely effective. That is why CCIMs understand that staying ahead of emerging technology is critical. CCIMs help clients, business owners, investors and other professionals by adeptly avoiding the pitfalls that await with AI as a fast-moving, quickly evolving tool.

Ways AI Helps Commercial Real Estate Professionals

AI helps commercial real estate professionals in many ways when used correctly, and while that is great, what really matters is that it helps CCIMs better serve business owners and other professionals. We’ve broken down ways AI helps commercial real estate professionals, which in turn helps everyone involved in the transaction.

Property descriptions: If AI is used like an interview, it can help describe a property. By feeding questions one at a time, AI can describe commercial property.

• Benefits: This helps everyone looking to sell or buy commercial properties. Accurate descriptions are just the start of the transaction, so it’s important that AI can help speed up that process while remaining accurate.

Social media and blog ideas: AI can be a handy tool for marketing to prospective clients. In particular, it can be utilized to help refine who an ideal client is and then creating the persona that matches that ideal client.

• Benefits: Marketing to the right people is key for business owners and landlords looking to sell or lease property. By using these personas, marketing materials can act as a velvet rope that weeds out bad prospects, so everyone’s time is used efficiently with strong prospects.

Test Models and Valuations: When it comes to valuations, AI helps test models and run different scenarios. For example, if rents don’t increase, what are we underwriting? While double checking the math is critical, AI is a huge help with those models.

• Benefits: Quickly analyzing information helps every professional involved in the commercial real estate deal. These valuations are critical in the decision process, and with a quicker valuation along with more information, strong decision-making can be built on that data.

Making AI Work for Success in Commercial Real Estate

While all those benefits are great, you may still be wondering how exactly to utilize AI effectively. You also want to avoid the pitfalls that accompany AI. Here are some tips for making AI work for you.

Treat AI Like an Intern. You have to review the work. You wouldn’t give a project to an intern and then not review it. The same should be true with AI.

The more you train it, the better it gets. With each new iteration, you can get further faster. AI is like a member of your team. It’s a really smart intern but an intern’s work requires review.

Hallucinations are where AI makes stuff up, and that is a major problem. That is why review is essential. It’s up to you to ensure the details are accurate.

Provide robust information: The better your input, the better AI outputs. If you provide more robust information and questions, you’ll get better results from AI. Your preliminary information is very important. You can get a deep dive in a relatively short amount of time, and it starts with the information you input.

That said, you should also be wary of what data you share – especially sensitive data where privacy issues become a concern. Be cognizant of your inputs.

How AI Helps All Parties in Commercial Real Estate Deals

Whether you’re an investor, a business owner or a commercial real estate professional, your focus isn’t about explaining what you do but rather what you can help your clients do. AI is a tool we use, but it’s the expertise and the service we provide in commercial real estate transactions that truly matters.

For example, as a CCIM, Site to Do Business is part of what we gain access to upon earning the designation. It’s an incredibly powerful tool that requires a learning curve, and it now has an AI component, which takes multiple steps and narrows them down into fewer steps. Say I was helping a client with site selection for a regional coffee retailer, I could go to the market area, and quickly add competition and its logos on the map. Then I could put a heat map on to show population density and median household income demographics. That gap analysis will show where there is opportunity. The AI component of Site to Do Business condenses those steps, and while that’s great, the real importance is the insight I’m able to offer clients. It’s not about what I can do, but rather it’s about what my clients can accomplish if they allow me to advise them.

AI allows us the time to be creative in how we present information and how we package up information. In turn, that helps sell properties and form long-lasting relationships built on trust.

AI is changing the speed of business. While you should still be careful to ensure accuracy, it really is a gamechanger. I haven’t come across any part of business that can’t be augmented and made more effective and efficient by utilizing AI. The pace of progress is fast. If you don’t use it, you’ll get left behind. As experts in commercial real estate, we understand how to utilize these tools, so we can help our clients accomplish their goals.