Artificial Intelligence (AI) is transforming industries worldwide, and the company real estate (CRE) sector is not any exception. The “Colliers Global AI in CRE Report 2024” provides an in-depth exploration of how AI is reshaping CRE, offering significant breakthroughs and long-term advantages. The report covers various points of AI’s impact specializing in key areas similar to implementation, advantages, challenges, and future opportunities.
The Current Landscape of AI in CRE
AI Implementation Plans
A significant slice of CRE leaders are gearing as much as integrate AI into their operations. In response to the info:
- 33% plan to implement AI inside the following two years.
- 26% aim to accomplish that inside the following 12 months.
- 12% expect to adopt AI inside the following six months.
- 12% anticipate implementation inside the following five years.
- 9% have already implemented at the very least one generative AI solution.
- 7% don’t have any specific timeframe in mind.
AI Categories in CRE
Colliers has identified six primary categories of AI which are currently being utilized or expected to be adopted soon:
- Natural Language Processing (NLP) – Understands, generates, and interacts with human language.
- Machine Learning (ML) – Learns from data and improves its performance over time.
- Predictive Analytics – Analyzes historical data to predict future trends.
- Expert Systems – Mimics human expert decision-making abilities in specific domains.
- Generative Models – Generates content similar to images or text based on large datasets.
- Computer Vision – Analyzes and interprets visual information from the world.
Challenges and Key Focus Areas
The novelty of AI introduces challenges, particularly in data management and standardization. Colliers emphasizes five key focus areas for successful AI implementation:
- Transparency – Standardizing and sharing data across CRE firms to utilize AI’s full potential.
- Comprehensive Data – Ensuring data is comprehensive and unbiased for accurate AI application.
- Governance – Developing data governance programs to attenuate risk and ensure data accuracy.
- Data Volume – Leveraging the vast amount of knowledge in CRE for effective AI training.
- Data Management – Efficiently managing and regulating data access and integrity.
AI’s Projected Impact on CRE
Economic Impact
By 2030, AI could automate activities that account for as much as 30% of hours worked within the US economy, significantly impacting productivity and economic value. McKinsey estimates generative AI could add $2.6 trillion to $4.4 trillion annually to the worldwide economy. Nonetheless, this also means as much as 12 million occupational transitions could also be mandatory by 2030, with 80% of affected jobs falling into 4 major occupations.
Market Growth
Investor interest in generative AI continues to soar, with significant funding increases:
- 2017: $1.0 billion
- 2023: $29.1 billion
Generative AI market revenue is projected to grow at a compound annual growth rate (CAGR) of 57.8% from 2023 to 2028, reaching $36.4 billion by 2028.
AI in CRE Service Delivery
Key Areas of Impact
AI is poised to revolutionize several CRE service areas, including:
- Location Intelligence – Identifying latest and emerging talent pools and locations.
- Supply Chain Solutions – Predicting real-time adjustments to demand forecasts or inventory requirements.
- Project Management – Optimizing resource allocation and price management.
- Transaction Management – Enhancing location options with automated workflows.
- Workplace Advisory – Generating different occupancy and 3D space options.
- Lease Administration – Streamlining processes with OCR AI technology.
- Portfolio Strategy – Constantly optimizing portfolios with predictive analytics.
- Facility Management – Implementing anticipatory constructing maintenance and automatic notifications.
Case Studies and Examples
Lease Administration
- Issue: An energy company faced a cyberattack, disabling all systems.
- Solution: Colliers used AI OCR to extract details from over 40 images, achieving a 90% capture rate and notifying over 400 landlords of payment delays.
Facility Management
- Current: Facility managers collaborate to cut back costs and enhance worker experiences.
- Future: Predictive analytics and machine learning will optimize energy use and preventative maintenance, leveraging IoT devices for enhanced facility management.
Supply Chain Solutions
- Current: Consultants use spreadsheets for demand forecasting.
- Future: AI will enable real-time adjustments based on operational and external data, optimizing supply chain efficiency.
Workplace Advisory
- Current: Consultants design customized workplace solutions.
- Future: Machine learning will analyze survey data and generate 3D renderings, enhancing worker experience.
Portfolio Strategy
- Current: Consultants analyze portfolio data to align with business goals.
- Future: Machine learning will provide real-time recommendations on market trends and optimal property mixes.
Location Intelligence
- Current: Studies discover ideal locations for hiring needs.
- Future: Predictive analytics will mechanically recommend locations based on market trends and talent availability.
Project Management
- Current: Project managers oversee resource management.
- Future: Generative AI will create concept designs, cost estimates, and safety plans, improving project efficiency.
Transaction Management
- Current: Managers organize real estate transactions.
- Future: AI will automate workflows, create marketing strategies, and supply market evaluation for higher decision-making.
Additional Considerations
Emerging Job Roles
AI will create latest job opportunities inside CRE, similar to AI ethics experts, security engineers, AI-enabled property managers, and AI trainers.
Ethical Concerns
AI raises ethical concerns, particularly regarding data privacy and the usage of proprietary information. Corporations must balance effective AI utilization with maintaining ethical standards.
Advantages of AI Implementation
AI can minimize errors, increase profitability, streamline processes, and foster revolutionary problem-solving.
Industry Outlook
AI is anticipated to have a transformative impact on CRE, comparable to the appearance of the web. The technology’s rapid evolution presents a golden opportunity for CRE firms to achieve a competitive edge.
Conclusion
The mixing of AI in CRE offers substantial advantages and opportunities for innovation. By addressing challenges related to data management and ethical considerations, CRE firms can harness AI’s potential to boost service delivery, optimize operations, and drive economic value. As AI technology continues to evolve, its impact on CRE will only grow, making it essential for industry leaders to remain ahead of the curve and embrace AI-driven solutions.
To learn more readers should download the Global AI in CRE Report 2024.
