AI arguably presents the greatest opportunities and risks of our time: How will it reshape the way we live and work, and improve our efficiency without losing judgment, context, and nuance?
AI is changing the foundation of every industry, including commercial real estate (CRE). From growing data centers and energy infrastructure to site selection, investment, and development strategies; the physical side of our industry is rapidly changing. However, that’s just one piece of the puzzle being reshaped by AI.
New technological innovations promise industry transformation and while there’s no question that AI based tools are changing behaviors and outcomes, we’re focusing on one question: How will AI realistically shape the near-term future of CRE?
To explore this, I sat down with our chief information officer, Martin Jepil, who joined Avison Young in 2021 from Hewlett Packard. Having worked extensively outside our industry, his experience allows him to break through legacy approaches and cultivate transformative thinking.
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Mark Rose: Looking at the capabilities of generative AI, I see a changing balance between the tasks done by people and those augmented by AI. This shift isn’t just an incredible opportunity; it’s a necessary move to keep pace. How do you see AI changing our industry?
Martin Jepil: With the ability to process various databases, AI models can create connections and identify patterns that humans cannot see as quickly. For CRE, this provides two overarching opportunities: improved productivity and knowledge.
With the potential to decrease the time intensity of projects, AI will increase the number of opportunities that can be handled by our teams. We will have more time and capacity to dedicate to differentiating ourselves and delivering beyond our goals.
Generative AI also offers potential knowledge gains. Does traffic in your office gravitate towards a specific workspace? Are there cyclical lulls in energy demand? Traditionally, answering these questions involves a time-intensive cross-referencing of both quantitative and qualitative data sources. AI will simplify these workflows and improve the insights delivered to clients around the location and performance of an asset.
Rose: What is your future vision as it relates to AI and how do you foresee the technology/IT roadmap taking shape at real estate advisory firms?
Jepil: Alongside data management, some of the most powerful uses of AI are in summarization, translation, and deep research. As an industry rooted in written, unstructured data, these AI applications are increasingly important.
An AI driven transformation will allow our teams to do more innovating, advising, and consulting beyond traditional transactional roles. Instead of being bogged down by routine tasks, they’ll focus on activities that make a larger impact on the built environment.
Our company is already a fully cloud-native organization, allowing us to be nimble and agile. Our next step is to become AI-native. That means embedding prompt-based features and automating tasks using machine learning and generative AI capabilities. This allows us to shift our people’s focus to high-value work such as business development, service delivery, and client engagement, while deepening our technology’s focus on predictive analytics, scenario modeling, and, ultimately, delivering better decision-making.
Rose: As we continue to adopt and integrate this new workflow, risks and challenges will arise. What are some of the greatest challenges around adopting AI technology in a meaningful way? And how can we use the skillsets of our teams to address these challenges?
Jepil: In our industry and beyond, the biggest hurdle continues to be quality of data. While there is a vast network of data, it is not structured or indexed in a way that allows us to easily derive value.
Beyond what we consider to be traditional CRE data, AI can facilitate the integration of ‘non-traditional’ data sources. There’s a wealth of untapped resources across the internet that might tell you more about a property. Demographic, building, and organizational data are significant unstructured data sources. The new patterns identified by AI will be even more valuable when there is access to both traditional and non-traditional data sources.
The first steps should focus on integration—figuring out how to facilitate communication between database infrastructure and sorting through unstructured data, such as sale and lease comps, property listings, and planning codes. This infrastructure must be organized properly to train generative AI. While this may seem like a behemoth challenge, it is a problem that AI can help to solve. Through data extraction and reading unstructured data, AI models are helping aid the integration process.
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Like any technology platform, AI is a tool that will enhance productivity and knowledge growth. For instance, when power tools were introduced in the construction industry, they didn’t eliminate the need for builders. Instead, they made builders more efficient, safer, and capable of handling more complex projects.
AI in CRE is much the same. It is not here to replace brokers, developers, or property managers but to give them more powerful tools. Above all else, AI will provide advisors with better tools to analyze data at scale, spot risks, and automate routine tasks so they can focus on the human insights, relationships, and decisions that ultimately drive value.
Final thoughts
Those who embrace AI thoughtfully and strategically will thrive. Thoughtful strategy includes having a vision for how peoples’ daily roles evolve and determining the viability of different AI functions. Employees who embrace AI will gain a deeper understanding of how people, businesses, and markets more generally impact CRE. As a CRE firm, setting a thoughtful strategy includes choosing the right AI tools and building the appropriate IT infrastructure to unlock that promise.
Our ambition? To lead in predictive analytics with a commitment to delivering outcome-based insights that combine real-time, platform-generated data with human interpretation and expertise, assisted by GenAI.
We believe that people, not technology alone, will be the key differentiator in the age of AI. The ultimate success of a built asset is shaped by the needs and satisfaction of its occupants. There will always be our priority to get boots on the ground, embed ourselves in projects, and—above all—anticipate human needs.
Mark E. Rose is chair and CEO of Avison Young.