Artificial Intelligence (AI) has begun impacting almost all spheres of life and business activities. Like in other fields, it is fast making inroads into the real estate industry, particularly in the commercial real estate segment. Although brokers still hold sway in terms of meeting the requirements of tenants, especially those who are new to the commercial real estate landscape, there is a gradual change in the way tenants are dealt with by brokers now.
AI is being employed by most commercial real estate companies and even by brokers to read the requirements of the tenants and other customers. The use of AI is seen as an emerging trend in the real estate industry which can bring efficiency for both, the commercial real estate companies as well as tenants and bring down several costs associated with finding new clients (for companies) and new office spaces (for tenants).
There are three main areas in which AI can help commercial real estate:
1. Search: A tenant has literally hundreds of properties to choose from in any city and usually does not know how to choose and where to start from – how to visit and what will be the rentals in a particular area and even in that area how much will be the rent for a particular building. Even within the building there can be differences in rents floor wise or frontage wise. A new tenant may find the going even more confusing than an experienced one.
Companies are now introducing chatbots that are asking pinpointed questions to the prospective clients and tenants which is not only helping them but also the clients. The chatbots are powered by AI and companies and clients are able to find a suitable space much faster and more easily. Companies can thus, provide better options to the clients and even clients can save time in looking up spaces that they just don’t want.
2. Logistics: In a typical rental transaction, there are a number of trips that are made by officials of the real estate company and the tenant, just to close a deal. There are a number of phone calls made and a number of mails exchanged. All this takes time and manpower which is sometimes not even needed. AI can replace much of the redundant communication and running around. It can track communication more effectively and bring down the number of contacts between the company and the tenant to just the necessary ones.
3. Negotiation: This is another area where AI can play a pivotal role. Usually, there is a hectic discussion between the tenant and real estate company for a rental deal to be finalised. The tenant sometimes does not even know where to start the negotiation and what would be the right rent to quote. There are a whole lot of minor points in a rental deed and those must be carefully agreed upon by the tenant. Here again, AI can streamline the negotiations and get the best deal for the tenant by looking at the exact requirement of the tenant.
4. Space utilisation: AI is helping both, the real estate company as well as the tenants to better use the space they have. AI is resulting in better space utilisation by them which is resulting in cost efficiencies too.