AI in CRE
Does anybody actually use AI in their day to day functions? The owner of my company keeps bringing up the 'power of AI' to my team and insisting that we find a way to utilize it (we are primarily Acquisitions/AM). I see lease abstraction tools and other data management AI tools, but when I have talked with some of these groups in the past it just seems like smoke and mirrors and they secretly have a team doing all the heavy lifting checking the AI. Besides asking Chat GPT to reword an email from time to time, has anyone here really utilized AI?
helps me audit excel formulas and other menial tasks
which tool do you use to do this
chatgpt
Can’t underwrite a deal yet while automatically imputing market rents, hard costs, soft costs, etc. but that day will be a fun one.
Firms won’t know what to do with themselves when they can’t just give a new applicant the obligatory modeling test.
I've heard this sentiment around the industry, but I guess I don't get the focus on automating UW - I created a model for my firm that just takes exports from software we use for rents, budgets, etc and it's all handled with Excel formulas, no AI. I'm not even sure where AI could fit in the process (other than helping me write all the formulas in the model).
I use AI every day to ask questions, explore/learn new topics, write code/formulas, but I still feel like the general sentiment is a bit overblown. Not because it can't do what we hope, but because Excel, Zapier, and Python can already do these things. Maybe it just makes those more accessible?
Brother I don’t even know what the fuck Zapier is. I’m a real estate developer, not a programmer.
Of course it is to make it more accessible. Your model sounds cool, but 99.999999% of people in this industry don’t do it like you do.
ChatGPT is actually pretty decent at coding simple programs. I used to it create some python scripts that save me a lot of time and just learn it in general.
what do you use python for in CRE?
I have it read through Outlook, grabs invoice pdfs, then takes the information and puts it in a xlsx file which I can upload them into our accounting software. Also downloads the pdfs into a folder.
Great for parsing out data from lengthy legal docs
This is about it -- good for legal, helping Excel work it's nonexistent
One of the big brokerages is working on an AI tool that will replace the consulting / feasibility industry.
All you do is pick a piece of land and it will design and underwrite a whole development based on the market and cities zoning laws. It's actually crazy.
Already exists..it’s a software program called testfit
And it doesn't replace people - just makes development professionals better at their jobs
bump - most I've used it to date is help with long excel formulas that I'm too lazy to type out or figure out myself. Double checking is still needed of course.
I hate to use chat gpt on a forum but I thought it would fit here. Here is chat gpt's response to how AI can help CRE:
"
Property Valuation
Market Analysis & Forecasting
Tenant Screening
Lead Generation
Marketing Automation
Property Management Optimization
Deal Sourcing
Risk Assessment
Lease Abstraction
Contract Analysis
Portfolio Optimization
Construction Management
Smart Building Integration
Sentiment Analysis
Competitor Analysis
Negotiation Assistance
Custom Reporting
I would short all these ideas if i could.
Yeah, if someone is using an AI model to value a property, I am going to sell them them what ever it overvalues and buy what it undervalues from them.
I am pretty excited for the day where it can search against a repository of existing leases/documents and spit out info. Abstraction services are good but only get you 70% of the way there and also have potential of human error.
I am certain this already exists, but will be cool when it clears IT protocols and is more widely available to the masses.
The abstraction piece is actually the easier part of the problem. What nobody's really solved is what happens after -- you've got clean lease data but it's still sitting in a PDF summary or a spreadsheet, and someone's manually re-entering rent steps, CAM structures, co-tenancy provisions into the model anyway. That's where the errors manifest, not just the abstraction itself.
The version that actually makes a true difference in the workflow is when the extracted data feeds directly into the underwriting model and flags conflicts automatically -- like when the in-place rent on the rent roll doesn't match what the lease actually says, or if a go-dark clause isn't reflected in your vacancy assumptions. Retail is especially messy for this because the different clause types (percentage rent, co-tenancy, exclusivity, etc) have real cash flow consequences that aren't getting modelled because the data extraction step alone is already frustrating.
Pretty sure this exists or is close -- I'm actually building exactly this for acquisitions teams right now. Happy to chat if you're thinking through the same problem.
PM'd
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