ChatGPT: What will Artificial Intelligence (AI) do for commercial real estate?
AI: It’s everywhere, it’s becoming more intelligent, and its use is exploding in the real estate realm.
The latest and perhaps smartest example of artificial intelligence is the language model known as ChatGPT, or “Conversational Generative Pre-training Transformer”. ChatGPT was created by OpenAI and released in November of 2022. ChatGPT is trained on vast amounts of online data in order to generate responses to user prompts. It has written e-mails, poems, stories, song lyrics and research paper abstracts and even passed an exam at an Ivy League school. There have been numerous discussions on whether this latest AI bot is “too” smart for its own good—will students use it to cheat? Will medical professionals use this to counsel their patients or make diagnoses? Will authors use to write their literary works? Will we ever be able to distinguish between something that is answered solely by a human and solely by an artificial bot?
We are not going to delve into that discussion today, but rather to focus on what ChatGPT and other such AI can do for the real estate realm, specifically commercial real estate.
1) Commercial Lender
AI can be the perfect tool for the commercial mortgage business where clear communication is essential. ChatGPT has proven to be a powerful tool for the finance industry, helping to streamline processes, improve customer service, and make more informed decisions.
What are some of the other benefits of using AI/ChatGPT as a commercial real estate lender?
- Create mortgage lead generation;
- Provide real-time interactions with customers – automating repetitive tasks such as answering frequently asked questions is a real time saver;
- Automate loan origination and servicing;
- Automate the pre-approval process—benefits borrowers and saves time and money for lenders.
2) Commercial Real Estate Broker
Ask any commercial broker or realtor whether ChatGPT has made a difference in the commercial real estate world and they all seem to agree: Once you try it, you wonder how you did things without it.
Incorporating artificial intelligence in the real estate market is not entirely new. For example, Zillow has used AI for 3D mapping, and earlier this week, Zillow rolled out an AI-feature that lets potential buyers conduct searches in a more natural language.
What are the benefits of using AI/ChatGPT as a commercial real estate broker?
- Write listings – put in the parameters and it will give you a great starting template you can simply modify;
- Create social media posts – drafted in a manner to reach your target audience;
- Draft legal documents – from my perspective (an attorney) a little scary, but it can provide some legal basics;
- Automate repetitive tasks such as answering frequently asked questions – a real time saver;
- Do complex calculations – sometimes these are not exact, but can give a good estimate for your customer;
- Look up the permitted uses for certain land and zones in certain counties/locations – so much easier than going into individual sites and reading through city or township ordinances.
3) Commercial Investor/Lessor
AI benefits are being experienced in the commercial leasing and investing sector. Olive Tree Ventures’ Jeremy Kaner said that he is seeing exciting technology in multi-family properties.
“Everything from leasing chatbots to materials procurement, we’ve started to see this flow of technology, not to come in to fully replace employees, but just to make employees more efficient,” Kaner said. “We’re really on the precipice of seeing this revolutionizing real estate.”
As a commercial investor and/or a lessor of commercial property, what are the benefits of AI/ChatGPT?
Increase Return on Investment (ROI). According to Achieve Investment Group, the top five ways that ChatGPT will improve ROI are:
- Better tenant screening – analysis of tenant applications to identify most qualified and reliable tenants and to reduce the risk of defaults and evictions;
- Automated property management – automation of property management tasks, such as rent collection, maintenance requests, and tenant communications; saves time and reduces need for staff, potentially improving ROI by lowering operating costs and increasing efficiency;
- Predictive analytics – analysis of data and predictions about market trends and tenant behavior; leads to more informed decisions about where to invest and how to manage their properties;
- Enhanced customer service – provides fast and accurate answers to tenant inquiries, improving customer experience and possibly increasing tenant retention rates;
- Improved security – monitor security cameras and detect potential threats in real-time, improving the safety and security of multifamily properties.
- Identify trends and patterns – AI can assist investors in making the best investment decisions in the current market based on the vast amount of information and analysis and predictions available.
AI is here and so is the opportunity to explore and see what it has to offer and how it can make the most of your commercial real estate business, whether your focus is on sales, acquisitions, loans, investments or leases.
SVP, Corporate Counsel
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