ChatGPT, Open Source’s artificial intelligence model, broke onto the mass market approximately two years ago. When Microsoft invested billions of dollars into this new technology, you knew it was a big deal.
You can’t talk about the future of commercial real estate without recognizing the massive impact artificial intelligence is already having. ChatGPT, OpenAI’s groundbreaking model, burst onto the scene just two years ago, and the ripples have been impossible to ignore. When Microsoft poured billions into OpenAI, it became clear this wasn’t just another passing tech trend.
I wrote one of the preceding paragraphs. Can you guess which one? Exactly!
So, there is one example. Using AI to draft long form narratives — blogs, stories, property descriptions, case studies and the like.
But to only highlight this function would be to dramatically understate its capabilities.
Recently, our office of Lee & Associates selected a new president. A committee was formed, of which I was a member. We used AI to craft a job description for the position, and we asked each candidate to prepare a business plan. These plans were poured into the engine and asked to compare and contrast each candidate based upon their plans vs the job description.
We created from Chat 10 interview questions and a scoring system based on each response. Chat even chose the most likely to win the ratifying vote. How’d it do, you may ask? Well, the candidate it selected wasn’t the candidate who won by vote. Suffice it to say, we humans still reign.
To explore how AI will impact the eight key steps of brokerage, let’s break it down step by step. AI isn’t just a buzzword — it’s a tool that can enhance every phase of the process, making agents more efficient and effective while providing deeper insights. Here’s how:
1. Sourcing. AI excels at combing through massive datasets, from public records to online listings, to identify properties or clients that align with specific criteria. Machine learning models can analyze market trends, demographic shifts, and historical data to pinpoint opportunities agents might otherwise overlook. Tools like predictive analytics can even forecast areas primed for development or investment.
2. Finding. AI-powered platforms streamline the property search process by matching client needs with available options. Imagine entering a set of requirements—location, size, zoning, budget—and having an AI return a tailored list of properties in seconds. Virtual tours enhanced by AI can also give clients a more immersive understanding of spaces without setting foot on-site.
3. Qualifying. AI can automate the process of qualifying leads, saving agents time and energy. Chatbots and CRM integrations can engage with prospects, ask key qualifying questions, and prioritize leads based on their likelihood to close. AI tools also analyze creditworthiness, tenant histories, or business viability to ensure prospects meet necessary criteria.
4. Controlling. Managing the flow of information and timelines is critical. AI tools like project management software can keep deals organized, automate follow-ups, and provide reminders for critical deadlines. Natural language processing can even analyze communication patterns to detect when a deal might be at risk, giving agents the chance to course-correct.
5. Execution. During the negotiation and documentation phase, AI can analyze lease terms, purchase agreements, and market comps to provide insights or identify red flags. Smart contracts, driven by AI and blockchain, can automate parts of the execution process, ensuring compliance and accuracy while reducing the time spent on back-and-forth negotiations.
6. Closing. AI can improve the closing process by streamlining workflows, automating document generation, and ensuring all compliance requirements are met. It can also track progress on escrow, title searches, and financing approvals, reducing the likelihood of delays. Digital signature platforms with AI integration further simplify the closing process.
7. Compensation. AI can help ensure compensation agreements are tracked accurately and fairly. Systems integrated with AI can calculate commissions, track payments, and generate transparent reports for all parties involved. Additionally, predictive analytics might help agents model future compensation scenarios based on their deal pipelines.
8. Continuation. The work doesn’t stop after the deal closes, and AI ensures agents stay top-of-mind with their clients. Automated follow-up systems powered by AI can check in periodically with past clients, send personalized updates, or even flag when a client might be ready for another deal based on activity patterns.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
