When will automation come for CRE?
When do you guys think automation will come for REPE, REIB, REIT, CRE Development and CRE brokerage jobs? Are they at a higher or lower risk of automation compared to other jobs?
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Not anytime soon. CRE development is almost impossible to automate. It requires fundraising, local institutional knowledge, politics, architecture, legal, market analysis, contract negotiation, project management, accounting, lease-up, etc. Other than a human-like artificial intelligence taking over the job, I can't see any traditional forms of automation taking that job.
REPE and REIB are almost purely relational jobs at their core (the real, actual work is monkey work that anyone with a high school diploma could be trained to do, in reality). Again, until a computer has an AI/human brain, I don't see how those jobs could be automated away.
REITs---yeah, a lot of the administrative tasks I'm sure have been getting automated away for years. But the key "front office" aspects of REITs face the same human requirements as CRE development.
As an aside, I think real estate law could be largely automated IN PRINCIPLE but it would take a massive cultural shift. Right now, loan document legal work/paperwork is overwhelming and generally fairly well customized.
What about brokerages?
My understanding is that it’s very relational as well. And dealing with unique problems and overcoming them. In theory everything humans do can be replaced by AI that can teach itself. But that’s more of a question of computers becoming “living, thinking, and self aware” in which case they’d far surpass us. I digress.
I’m very curious to see how the junior roles change. It seems like excel modeling could be replicated by AI in the near future. But then.. it would not allow the pipeline of producers to progesss from analyst -> producer.
I have a lot of mixed emotions about CRE brokerage. On the one hand I think brokers are generally overpaid and often completely useless individuals; on the other hand, there's nothing like having access to a truly elite broker when selling or leasing real estate. There are aspects of the job that could benefit from automation, but ultimately it is a very human relational job.
Let's just say that we got to a point where all of the tangible output of brokers could be automated. It would still take a brain (human or self-aware machine) to originate the business. At its core, brokerage is sales, which requires a "brain." I don't see a near-future situation where a person selling a $40 million apartment building will log-in to a broker's website he finds on Google, inputs an address, and pays $500 for a machine to do the rest. Maybe that's what SHOULD happen, but will that cultural shift ever happen? Ehhhh, who knows?
The role of the investment professional will most definitely change in the years to come, but at the very least this role, is much more likely to not be dated by software comparative to middle office and back office roles. You will always need investment professionals for the relational aspects of this business.
Brokerage is already being disrupted. Look at Ten-X. More and more clients of brokers are requesting to go through the auction process. The process used be all cash, but now they have lenders willing to finance and clear terms in place. It also helps give the clients a real time look at what the market is valuing the properties at.
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