Artificial Intelligence (AI) is casting an influential presence across all industries, and the commercial real estate (CRE) sector is no exception. Esteemed author and futurist, Greg Lindsay, recently shared his insights with industry experts at NAIOP’s I.CON East conference.
Here are the key takeaways from his talk on the outlook of AI in commercial real estate.
1. The reign of data centers
As Lindsay conveyed during NAIOP’s I.CON East keynote address, AI has been pivotal in enhancing overall job satisfaction and productivity in the workforce. Amid fluctuating investments, AI’s unwavering demand has prominently cast data centers into the global spotlight.
In a recent interview with Bloomberg Television, JLL CEO Christian Ulbrich said that AI demand has turned data centers into the “hottest asset class,” creating what he says is “a rare bright spot in a commercial-property market faced with rising office vacancies.” In short, Ulbrich said, “When you believe in AI, the demand for data centers will only go up.”
This surging demand highlights a key dynamic shift in the CRE industry. The need for vast data storage and processing capabilities, a fundamental requirement for AI applications, has spurred a construction boom for data centers.
2. Architectural design using AI-assistance
AI’s impact on the CRE industry extends far beyond logistics, and it is reshaping the very process of architectural design. Lindsay emphasized that architects today use AI insights to explore additional layout options and enhance overall building performance. AI’s advanced algorithms provide innovative solutions to spatial challenges, boosting architectural creativity.
Referring to the use of AI in design, Lindsay asked the audience, “‘How do you design optimal routing?’ and ‘How do you add autonomy to design and performance of buildings?’” Such questions guide today’s wave of forward-thinking architectural design. AI’s processing power and predictive algorithms bring valuable insights, all of which are reshaping the way architects design and utilize space in CRE development.
3. Predictive analysis for decision-making
Beyond logistics and design, AI has another key role in the CRE industry: It harnesses the power of predictive analysis to aid decision-making. Lindsay explained that AI’s machine learning capabilities can parse enormous volumes of data to uncover patterns and forecast trends, helping stakeholders make informed decisions.
However, Lindsay pointed out, “Your expertise as a human to solve problems is hard to replace,” and “when the risk is high and the cost is low, a human is best.” This highlights how while AI in commercial real estate can revolutionize risk assessment, market predictions, and investment strategies, humans still play a pivotal role in the decision-making process.
AI in commercial real estate: A revolution
The insights from Lindsay’s discussion spotlight a dramatically transformed CRE sector driven by AI. As the industry finds itself influenced more by AI, it is crucial to strike a balance that capitalizes on AI’s immense possibilities while not losing sight of the unique human capabilities at play.
The power of AI in commercial real estate lies inherently in its ability to enhance and not replace human intelligence. This delicate harmony will be the foundation on which the future of commercial real estate will be built – a future marked by advanced technology while keeping human expertise firmly at its core.
As the CRE industry steps into this exciting new era, Building Engines experts are here to help you navigate the nuances and growing pains of said advancements. We encourage you to reach out to one of our experts to learn how you can implement AI-powered technology at your CRE properties.
