[RETCON RECAP] Future Proofing Your CRE Business with AI: 3 Strategic Approaches

CRE competition is brutal, and staying ahead of the curve is critical to long term success. Now, more than ever, that means leaning into new technology, including Artificial Intelligence. AI presents both challenges and opportunities for real estate professionals, providing security in market downturns and accelerated growth when things are going well.

This is a summary of a presentation given live at RETCON 2024. If you want to watch the full video version of this presentation, you can do so here.

Understanding AI: What it is, and What it Isn’t

AI has become the buzzword of all buzzwords, with vendors and professionals alike touting its potential to revolutionize operations. And we’re seeing incredible success stories across industries of AI’s incredible ability to save time, money, and effort, and create better working experiences for employees. 

However, amidst the hype, it's essential to discern what AI truly does and what it doesn't. There’s no faster route to disappointment than adopting new technology for the sake of it. It’s critical, then, for CRE professionals to focus on the areas where AI can make the most impact. Identify those repetitive, time consuming issues that take up your team’s time, and ask yourself “can (or should) this be automated?” 

If the answer is “yes,” then AI might be the solution.

AI Can Help You Survive Downturns

The criticality of automation really reveals itself when purse strings are tight. Right now, office vacancy rates are at an all time high (19.6% as of last year, according to Moody’s), and cap rates across property types peaked at 7% in H2 2023 (CBRE). 

During downturns, reducing expenses ensures survival. 

In these instances, AI can streamline operations and cut costs across the board by eliminating unnecessary time waste and maximizing limited resources by enabling you to: 

• Control & reduce operational expenses. Saving human-powered hours for high-impact work allows you to decrease wasted energy and output. 
• Protect small teams from burnout. Removing mundane tasks keeps employees focused and engaged (we’ll talk about this more in the next section).
• Identify small gains that have a big impact at scale. Sometimes it’s the little things that make a big difference—AI can help you turn seconds of saved time into hours of increased productivity.

AI Can Help You Retain Top Talent

Here are a few staggering statistics to bear in mind: 

• 75% of Gen Z would prefer flexibility over high salary (Deloitte)
• 40% would turn down job offer without flexible hours (Soter Analytics)
• 74% want to learn new professional skills (LinkedIn)
• 54% are ambivalent and disengaged at work (Gallup)
• 46% of AP professionals would turn down a job with no automation tools (IOFM & AvidXchange)

As we saw during the Great Resignation, employees are feeling more stressed at work than ever. Fluctuating markets, slow wage growth, and inflation are only adding to that pressure. And in a time when employees might be less likely to stick around amidst frustration, finding a competitive way to retain top talent becomes critical to everyone’s bottom line. 

There are three ways to go about improving your employees’ work lives: 

• Automate mundane work and repetitive manual tasks. Nothing burns a team out faster than boredom and redundancy, especially when those boring tasks take away from their ability to do more interesting work. Automation can help them get through that monotony faster, so they can make a bigger difference overall.  
• Create space for problem solving, new skills, and career growth. Reducing the time spent on manual tasks frees your employees up to learn new things and grow professionally, ultimately making them move valuable and productive over time.
• Remove silos and bottlenecks to get more done, faster. Especially during downturns, empowering your team to maximize the use of their time is critical. Ensuring that no one person is acting as a knowledge silo helps eliminate unnecessary backup and helps the team become more productive overall.

AI Can Help You Grow

Lastly, AI can be a critical ally for you and your team when it’s time to scale. 

Multifamily housing is expecting to continue growth in the near future, despite downturns elsewhere. And as apartment supplies increase, rent margins decrease, hurting margins. 

Meanwhile, we’re seeing an explosive demand for both industrial and senior living facilities, necessitating the need for fast, adaptive services. 

Operationalizing new portfolios and navigating growth without chaos and disruption is extremely difficult, but AI does have the potential to help the process become less painful: 

• Enable smoother transitions for employees. Like we mentioned before, eliminating knowledge silos helps to democratize the employee work experience. When knowledge is not hoarded, it’s shared, making it easier for new team members to make an impact faster. 
• Unlock the full value of past work in your ERP. We all know that historic data is crucial to getting the most out of any AI implementation. Without this technology, that data and knowledge sits unused. AI can mine value from work that’s already been done.
• Standardize & centralize for faster, easier ramp up. Distributed field work takes away time from employees’ ability to accomplish more impactful tasks. It also takes longer to teach, since remote training is a challenge. Centralizing tasks at corporate, rather than spreading them out across satellite locations, helps teams ramp up projects faster and decrease wasted time in the field.

Future-Proof Your Business With AI

As AI continues to evolve, its role in the real estate industry will only become more pronounced. Ultimately, it’s about operational resilience and the ability to keep your team going through anything. 

Whether navigating lean times or capitalizing on growth opportunities, CRE professionals stand only to benefit from embracing AI. By prioritizing outcomes, empowering employees, and driving  efficiency and innovation, companies can stay ahead in an increasingly competitive landscape.