REAL ESTATE NEWS

Artificial intelligence has transformed the commercial real estate space — but using the technology alone does not guarantee success and must be deployed strategically when using it as a tool to make decisions.

This was a message that resonated from Kate Jarvis, CEO of Fifth Dimension AI, a technology platform that supports real estate firms, at CREtech New York 2026 in a discussion that was moderated by Jake Heller, co-founder of PLOT Daily.

No Cohesive Strategy

Although AI is helping property managers and their teams be more productive, Jarvis laid out some reasons why it might not always work. A critical one is that there was never a cohesive goal in place to utilize the technology at the executive level.

In particular, AI needs to supplement net operating income and major aspects of business performance, according to Jarvis.

"So in choosing a tool, no matter which tool you use, you need executive buy-in at a strategic level that says, 'the metric we want to move is deploying dry powder faster and we want to do that with [at] same size and we're going to raise a new fund for even more money and we're going to do that by putting AI at the center of our underwriting process,'" she laid out in a hypothetical.

"Then the supplier that you work with should have a forward-deployed team and the software itself should have guardrails that make sure that the use of that tool contributes to that team."

Having a forward-deployed team is important in the process because this consists of account managers, engineers and technical teams that educate on how to best use a specific AI tool.

Starting At The Wrong Place

Newer firms can also make mistakes at the beginning of the process when first starting to use AI. This is the case with using tools for potential acquisitions. While Jarvis agrees that conducting due diligence here is valuable and it creates class efficiency, it's important not to neglect the financial operations side of the business. These probably "impact your P&L most," she said.

"Those processes are one of the best places to start for AI use if you choose the right supplier because that's going to give you immediate revenue gains," she added.

Loss recovery is an example of where AI can help on the financial operations side, according to Jarvis. Building the right software with real-time data can develop a recurring billing process for properties and deliver more revenue growth. The data can also recommend better suppliers that will offer you better performance across portfolios, at even more favorable price points.

When To And Not Use Basic AI Tools

Then the discussion transitioned into basic AI tools such as Claude.ai and ChatGPT. CRE firms use them — but in some cases it's best to avoid them.

For example, smaller businesses that employ five-12 employees can get away with using Claude to get "minor tax efficiency gains," according to Jarvis. It also might make sense for businesses to use tools like Microsoft Copilot and Claude to target what might be a fit to implement in the organization early in the process.

But when it comes to the enterprise level — that's when property managers need to be careful. One of the concerns Jarvis listed was over-saturating the available data, which leads to confusion.

"Before you had 10 versions of your valuation model, now you have 30," she said in an example.

"That's going to annoy your chief investment officer who has to read that model and say, 'oh wait, isn't column L usually linked to this asset and this; wait, where am I even supposed to be looking anymore for the data that I expect?'"

So using internal data is important at scale.

Partnerships Are Essential

Overall, to ensure smooth AI deployment, Jarvis stressed that partnerships are essential.

"You can't do it alone; you can't have a bunch of really smart tech people, even in your own business, do it without talking to the real estate people, she explained.

The bottom line, as Heller laid out, one of the biggest issues is when firms try to use AI to solve everything upfront. Instead, it should be a concentrated approach, with Jarvis recommending the financial operations side as a good starting point.

AI will continue to transform the commercial sector — but those who operate it most efficiently with a cohesive strategy will have the biggest advantage today.

Source: GlobeSt/ALM