REAL ESTATE NEWS

When implementing new technology for commercial real estate operations, never overlook or underestimate who will be using the latest software, according to San Diego-based Allie Taggart, vice president of property management at Pacific Coast Commercial.

“If they don’t understand it and how it will improve their job, then they won’t use it,” Taggart said, speaking at the Rent Manager User Conference in Chula Vista, Calif., last week.

“You need to prepare your staff on how to use it, and implementing it should come from the leadership down,” she said. “They need to showcase it as a solution and listen to all the questions and the fears from their employees.”

When deciding to use artificial intelligence (AI), for example, operators must weigh the impact on their teams and the risk for their companies.

“Currently, we’re using it for small repeatable tasks like invoicing and note-taking,” Taggart said. “When it comes to things like compliance and underwriting and building relationships, AI is not there to help us yet.”

She said the barriers to AI adoption are security concerns, adoption costs and return on investment.

Taggart said using AI to assist with search is a no-brainer.

“The time-saving that it creates is obvious, but we’ve found that when you want to make the case for using AI to investors, don’t just add up the hours you saved, instead you should make a list of all the extra things that you can do because of the time you saved – such as giving more time to working on a Cap X plan or other long-range planning," Taggart noted.

Fellow panelist Hue Chen, president of Saglo Companies, a malls operator in the South, said AI is not 100% correct yet and that’s the risk when applying it to multi-million-dollar deals.

“It might be right 97%, but if you’re doing $150 million deal, and it’s 97% correct, that’s not good enough,” he said.

Survey Suggests Most Firms Underprepare

Dealpath recently commissioned a survey of 100 mid- to senior-level professionals at leading institutional real estate investment firms, including C-suite leaders at firms across North America with more than $500M in AUM, about technology.

In a report called “The State of AI Readiness in Commercial Real Estate,” it found that 90% of firms have established or are in the process of establishing AI-focused teams or leads. Meanwhile, 93% report barriers to adoption, led by lack of internal expertise (43%), regulatory/compliance concerns (42%), budget constraints (39%) and decentralized data (36%).

While every major institutional real estate investor is racing to adopt AI, few feel fully prepared, the report implied.

The survey also found that 43% already use tools like ChatGPT, Copilot or Claude for basic tasks.

Respondents know that, when using AI internally, data infrastructure is crucial and therefore 98% say improving systems for this technology is a top 24-month priority.

Mirroring Taggart’s comments, current use cases are dominated by document analysis (67%), portfolio monitoring (61%), investment memo creation (56%) and offering memorandum/flyer extraction (49%).

“The survey results corroborated for us that real estate investors are pragmatic when it comes to AI; they're looking for tangible ROI,” Ursula Sage, senior director of product and design at Dealpath, told GlobeSt.com.

“This is driving a massive push for better foundational infrastructure. So, what was interesting to see was that 98 percent of respondents said improving data systems for AI is a top priority, which tells you firms understand that robust, centralized data is the indispensable engine for any successful AI adoption.”

Source: GlobeSt/ALM