Proptech has never been afraid to embrace the cutting edge. New technologies have repeatedly created opportunities and improved efficiencies throughout the commercial space. Artificial intelligence could be the next great leap. But what will that look like?
In 1997, Deep Blue became the first supercomputer to beat a human grandmaster in a chess match, narrowly defeating world champion Garry Kasparov in New York. More than two decades later, it should come as no surprise that artificial intelligence could soon outperform its human counterparts in the commercial real estate sector.
In the coming years, many fields will begin to benefit from developments in artificial intelligence. Sectors as diverse as cybersecurity, logistics, and financial services are expecting shakeups as a result of this emerging technology. AI’s unique capacity to translate complicated information into simple, actionable trends and forecasts could be a game-changer.
If you’re in the commercial space, you know that using data to predict trends, pitfalls, and opportunities is of vital importance. And that’s what makes artificial intelligence a natural fit for the commercial space.
First and foremost, artificial intelligence should be seen as a tool for working at a level of scale and efficiency that a human workforce simply cannot attain.
At its most basic level, artificial intelligence doesn’t do anything different to human experts. Like present day experts, it takes existing data and analyses it to provide actionable conclusions. It simply does it with greater speed and precision.
Consider the human approach to investigating potential real estate investments. A human expert will visit a series of buildings; assess a variety of issues such as size, location, and proximity to services; then come back with estimates of each site’s value. But this requires a significant output of labour. Even an entire team of workers will only be able to assess a limited number of buildings.
Enter artificial intelligence.
AI’s skill for pattern recognition can be used to scout for potential opportunities in the physical world. There are existing AI tools – such as OfficeBlocks – that can use a photograph of a building to estimate the rental value of a property without the need to even step inside.
This immediately makes it possible for the initial scouting process to cover far greater ground. And that means that portfolio managers will be able to compose a shortlist of real-world opportunities in a fraction of the time it used to take them.
If there’s one advantage artificial intelligence has over its human counterpart, it’s the ability to understand large numbers. And large numbers are central to the challenge of managing buildings and investment portfolios. Portfolio managers, for example, have to keep track of dozens, even hundreds of investments. Each of those investments could house dozens of tenants. And any one of those tenants could employ hundreds of people.
Let’s say you’re a portfolio manager who manages a dozen buildings in a large city. Traditional management will always be necessary; you’ll still need to check in regularly with your building managers and tenant representatives in order to identify high-level issues.
But AI – in combination with a tenant experience platform like Equiem – could afford you a new view of the situation on the ground. By capturing previously invisible details about the way your tenants interact with their building, you gain an understanding of their motivations that even they may not have. And that could become a crystal ball for the health of each investment property, or even the entire portfolio.
Imagine you could use the data surrounding how occupiers of a smart building engage with their building’s eCommerce strategy. A human might look at the top-performing retailers, compare them to those in other buildings, and isolate a trend emerging for a particular type of service.
With AI, on the other hand, it may be possible to automatically compare the performance across an entire portfolio, analyse which types of tenants are most likely to prefer certain goods or services, and accurately forecast the future performance of potential retailers for specific buildings.
Sure, it may just boil down to more accurate ROI forecasts – but extend that accuracy to every area of your investment, and it could add up to a massive difference on the balance sheet.
That same flair for segmentation and pattern recognition could also allow AI to alert property and portfolio managers to tenants that need attention.
With access to the data from your entire portfolio, a sufficiently advanced AI platform could detect unexpected indicators of a tenancy that is at risk of termination. There are indicators we know to look for such as lower levels of engagement, a shrinking user base, and so forth. But with the ability to compare every terminated tenancy across an entire portfolio, an AI platform will be able to notice patterns that we couldn’t.
Again, this won’t replace the need for old-fashioned, face-to-face tenant management. But it will fundamentally change the way property managers triage their tenancies. With this added ability to analyse the health and satisfaction of tenancies in real-time, property managers can expend their energy where they know it will do the most good.
It’s simple… data. To properly take advantage of the boon that AI is becoming, it will be important to have as much tenant and user data as possible.
This data is basically food for an artificial intelligence platform. Property managers and portfolio managers have always used data about their tenants and users to make important strategic decisions. The difference is that artificial intelligence can do this with a far greater level of efficiency and thoroughness.
A tenant experience platform like Equiem will be essential in this new, data-driven world. The ability to collect data points for every moment of interaction and engagement is already priceless today. Imagine its power when we can leave the analysis of that data to a machine that’s faster and more efficient than any human brain.
AI is the future, but it can only be built on a foundation of data. Book a free demo of Equiem today to start building that foundation in your buildings.