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There’s plenty of potential for emerging technology to disrupt the commercial property sector.
It’s been bubbling away in the background for quite a while, but now, all of a sudden, it’s front and centre stage, spawning a slew of headlines, think pieces and personal reflections on its powerful and, in many instances, the terrifying potential to revolutionise life and work as we know it.
I refer, of course, to AI — artificial intelligence. Historically the stuff of science fiction, it’s now at the fingertips of every individual who cares to experiment with it, in the form of Chat Generative Pre-trained Transformer, better known as ChatGPT.
Launched as a prototype in late 2022, it’s a chatbot that’s proven itself capable of delivering detailed responses across many fields of knowledge at bewildering speed. From summarising 200-page white papers in the same amount of time it takes to type up the headings, to creating on-point blog posts and presentations, it’s powerful technology in its own right and a harbinger of what’s to come.
As the high-tech behemoths continue to pour billions into research and development, we’ll soon enough see the emergence of AI programs that can generate not just natural language responses, as ChatGPT does, but audio and video too.
Digital dinosaurs
So, how will these high-tech developments affect the property world?
It’s an interesting question.
As things stand, large segments of the sector remain only partially digitised. One of the last bastions of analogue systems and processes, it’s an environment in which seven and eight-figure investment decisions are still made on back-of-envelope calculations, instinct and experience.
That’s begun to change, though, as a growing cohort of younger professionals look to adopt cloud-based solutions and platforms that make it easier to make timely, data-driven decisions.
This, in turn, has led to the emergence of a fast-growing ecosystem of proptech developers. Many are focused on creating specialised solutions that enable investors and property businesses to operate more efficiently, and collect and analyse data that can be used to identify trends and extract actionable insights.
Game-changing technology
Some old-school types have successfully ignored these developments; however, subscribing to the philosophy that doing things as they’ve always been done is as good a way to proceed as any.
While it’s been possible for them to take this tack, as far as technologies designed to help property professionals do their jobs better, AI-driven platforms and applications are likely to prove a very different kettle of fish.
That’s because continuous improvement in the AI tools is baked into their design as they learn from large training datasets. To the point at which they may become not helpful aids but, rather, credible replacements for some property personnel.
Might investment managers be among their number? To date, we’ve seen no strong appetite for replacing people with machines, in that aspect of operations. Investment management in commercial real estate is regarded as a specialised skillset that requires practitioners to draw on years of market insights, their personal knowledge of comparable properties and a sound understanding of prevailing market conditions. Specialised solutions like Forbury’s institutional grade property valuation platform are deployed to validate their judgements, not to make them.
But that won’t necessarily remain the case. If it becomes possible to amass and distil valuers’ accumulated smarts into a solution that’s accessible by anyone with an internet connection, what then?
Understanding the new
So as the AI juggernaut rolls on, how exactly will this impact investment managers working in commercial real estate? My view is that the first wave of AI adoption will be mostly focused on “augmentation” — placing high-power tools like ChatGPT alongside existing work practices to make processes more efficient, reduce errors, improve decision-making and ultimately “level up” commercial real estate investment managers. I expect the benefits will accrue to the early adopters, who will steal a march on their peers to such an extent that it will drive wholesale behavioural change within the next 12–24 months.
It’s an exciting time to be working at the intersection of technology and commercial real estate and I would welcome the entire industry to embrace the opportunities AI presents.
Scott Willson is the CEO of Forbury
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