Commercial real estate investment firm BGO, headquartered in Miami and managing $89 billion in assets, is leveraging artificial intelligence to sharpen its investment strategies and uncover undervalued properties across the U.S. Co-CEOs John Carrafiell and Sonny Kalsi have spearheaded the initiative by feeding two decades of BGO’s investment performance data into a proprietary AI model. The system analyzes thousands of local market indicators—such as rent levels, tax rates, labor costs, and telecommunications data—while downplaying broader economic trends and national pricing.
This AI tool recently influenced a significant investment partnership with Northpoint Development in Las Vegas. While conventional data models didn't flag the area as promising, BGO’s AI model identified Las Vegas as a cost-effective alternative to the expensive Inland Empire in California. The investment paid off: BGO underwrote the Las Vegas industrial space at $5.88 per square foot, but actual rents hit $9 per square foot. The AI model has also been used to identify profitable opportunities in Florida, which the firm says has driven measurable improvements in portfolio performance.
According to Managing Partner Matthew Cervino, BGO is now refining its AI capabilities to offer ZIP code-level insights, allowing the team to avoid poor investments and spot hidden upside. “Sometimes our best investments are the ones we don’t make,” Cervino noted, emphasizing the tool’s ability to reveal market patterns not easily visible through traditional analysis.
BGO isn't alone in this tech-forward approach. BlackRock's real estate division is also exploring AI integration. Global co-head Paul Tebbit revealed earlier this year that the firm plans to add AI as a “consultative member” to its investment committee, offering unbiased deal assessments and pattern recognition across historical data.
While BGO’s AI model is reshaping how deals are sourced and underwritten, Carrafiell cautions that despite its potential, AI cannot predict the future and should be viewed as a powerful guide—not an oracle. Nonetheless, the firm sees its AI-driven strategy as a key competitive edge in navigating a rapidly evolving real estate landscape.
