Will Artificial Intelligence Close a Commercial Real Estate Transaction End to End?
- Michael Beckerman
Read this fascinating article about how A.I. is transforming the financial sector. Not completely. But certainly making inroads: A.I. Has Arrive in Investing. Humans are still Dominating.
Artificial intelligence programs increasingly help fund managers in running their portfolios, but will they will be good enough to replace them?
I have long been fascinated by IBM’s Watson and increasingly, its progress in assuming many tasks are better performing than humans in business. It is replacing office workers in legal, insurance, and many other business sectors.
Imagine what it could do in the brokerage sector.
If I am a tenant, I can come to a site that is A.I. powered, type in my requirements, select a style guide, give my financial parameters, select the type of location I am seeking, etc., and BAM –here comes my recommendation from Watson of where I should relocate, what the best lease terms are, and how much I should pay based on market intelligence it gathered.
I would then be directed to a site that had the exact location served up by Google. I would then submit my standard lease and legal docs which were generated by an A.I., legal site, and BAM –I am in business in a new location.
Of course it’s more complicated than that. But is it realistic? Can it happen?
I think many parts of it could happen, no doubt. If A.I. can handle billions of financial trades with great wealth at risk, why can’t it handle a company’s lease? Especially if the business world is moving towards short-term leases (as many are obviously suggesting).
What I don’t think A.I. can handle though, is the human aspect of the commercial lease or sale transaction. There is always room to negotiate in every one of these transactions. How to negation TI allowances, how much free rent to go after, what other perks can be negotiated, etc.
Brokers play a vital role, not just in the negotiation process, but in offering invaluable advice to companies on hot or cold markets, local amenities, quality of life issues, future location trends, labor pool data, etc. Invaluable in such an important decision for a business.
But, clearly the day where A.I. and Machine Learning begin to assume a great many of the manual tasks performed by humans, is coming into commercial real estate. It would be at the detriment to many in the industry if they think they will be immune to this tech revolution.