It feels like we can hardly go a day without hearing about AI. Generative AI burst on the scene last fall and ever since, the drive to adopt AI has reached a fever pitch. Everyone is asking themselves, how can AI strengthen our data strategy and support our business goals?
VTS joined Realcomm at their inaugural BuildingsAI event a couple of weeks ago to discuss just that. It was a day jam packed with conversation, fascinating sessions and impressive AI case studies from across the industry. I was invited to speak on a panel called “AI Insights & Outlook | CRE Industry Leaders Discuss the Roadmap to Tomorrow,” and I also heard from leaders at Microsoft, Columbia University, McKinsey, CBRE, PGIM and more throughout the day.
So, What is AI?
What was common in all the sessions was that AI is an umbrella term for technologies that power faster, better decision-making and workflow automation. Analytical AI and Generative AI are two common categories you might be hearing a lot about.
Imagine Analytical AI and Generative AI as resembling the two key capabilities of the human brain: analysis and creativity. Just as we can process information logically and generate new ideas, AI technologies have evolved similarly. For years, technology has enabled software to perform analytical tasks. However, recent advancements in AI are now allowing computers to demonstrate a form of creativity, opening new possibilities in how they assist us.
Think of Analytical AI as a genius mathematician that is great at solving tasks, classifying data, and building predictive models. When it comes to CRE, this can power initiatives such as identifying portfolio trends and predicting tenant churn. In fact, at VTS, we leverage Analytical AI to identify real-time market demand trends in VTS Data, as well as to power insights into portfolio-wide tenant relationships in VTS Lease.
On the other hand, Generative AI is more of a content creation wizard. In fact, ChatGPT, a prolific, public Generative AI application, actually doesn’t do very well on math problems! That said, AI content generation is an exciting new horizon for CRE. For example, Generative AI can create LOIs, write marketing copy or power a chatbot that manages tenant and property communications.
While Analytical and Generative AI power use cases differently, both will drive meaningful transformation for commercial real estate.
Clean Data is the Cornerstone of Great AI
Whatever you're planning to do with AI, it's only going to be as good as the data you give it. It's like making a meal – if you start with subpar ingredients, you're not going to get a five-star dish. If your AI gets fed data that's not quite right or incomplete, it's going to give you answers that are off the mark. It's pretty straightforward, really. We talked about this in every session – your AI is only going to stand out if you've got your own unique, well-organized data ready to go.
Period.
As Alex Wolkomir from McKinsey & Company put it during (session), in this age of AI, “Data is like oil. It's incredibly valuable, but it needs to be refined.”
To effectively manage your data within your organization, focus on two main areas. First, emphasize initiatives that keep your teams well-connected and working digitally together. Second, carefully select reliable technology partners who can support both you and your data strategy
If your teams are disconnected/offline, or if you’re counting on an array of siloed systems to power your organization, your data is going to be messy and incomplete. On the flip side, if your team is set up to work cohesively and rely on a trusted, shared source of truth for information, you’re creating the type of data that can fuel impactful AI-enabled use cases.
We’re living in a time mired in uncertainty and change in commercial real estate. In this new landscape, the owners who harness the power of their proprietary data to make better decisions and drive automation will outperform the market.
Driving Impact is Your North Star
While it's tempting to get swept into the buzz around AI, it's key that you maintain a strong perspective on which outcomes you’re trying to drive for your organization.
As Josh Panknin from Columbia University put it, “A hammer is great at driving a nail into a wall, but if you walk around with a hammer looking for things to use it for, you’re going to waste a lot of time.” We can think of AI similarly. Instead of starting by saying “I need AI,” instead say “I have a problem I’m trying to solve, and I need to evaluate ways to solve it, including AI.”
Once you identify your use case, stakeholder buy-in helps you get it across the finish line. Define the problem you're trying to solve and identify which cross-functional KPIs will help you measure success. This will help you garner support for the initiative with your leadership teams and ensure that you’re focused on the most impactful investments possible.
Democratize Access to Power Better Human Decision Making
Outputs from great AI can’t drive impact on their own – it still comes down to thoughtful human decision making. Think of AI as a helpful copilot always by your side, giving you the information you need to make the right decision or help you with a task.
It's a red flag if someone trusts an AI-provided answer or AI-generated copy at face value without a closer look. AI isn’t solving the unsolvable problems of the world, but it is capable of empowering your teams to make the right decisions faster.
In order to drive impact with AI, you need to invest in your people and democratize access to AI outputs. This means building or investing in digital tools to surface key insights, providing focused training for your teams, and committing to change management.
You could create the best AI-powered solution in the world, and it wouldn’t matter if your organization isn’t equipped to use it. Invest in a first-class team of domain experts who are set up to work together so they can take the insights AI delivers and use them to drive your business outcomes forward.
Responsible Uses of AI
CRE is in the nascent stages of adopting artificial intelligence, and any new technology introduces the possibility of new risks. It's essential that anyone advancing AI in the industry does so with an unwavering commitment to data security and risk mitigation.
When your teams and your clients trust you with their data, protections are necessary to ensure it is safe. That’s why we maintain strict internal policies and controls that meet industry standards regarding governance, security, confidentiality, and privacy here at VTS.
There are also instances of AI tools suffering from embedded bias and discrimination. It's important to be vigilant in guarding against this by leveraging safeguards and regularly monitoring the answers being produced.
Lastly, be thoughtful and deliberate in the way you employ AI for the first time. Start with a dataset you trust and understand, host it locally, see how it works, then iterate until you accomplish what you set out to do.
Looking Ahead
The market today is facing rapid changes. In addition to macroeconomic headwinds that created broad market instability, CRE as an asset class is facing its own notable transformation. Tenants are touring fewer spaces in person, and they’re expecting more from their buildings and property teams. With so much change afoot, a decision based on stale or backward-looking data is a bad decision.
Data, and more importantly, the ability to harness data, is the most critical competitive edge you can have today. AI is a powerful technology that can help you in advancing your data strategy.
AI aside, the most important thing you can do is invest in your teams, ensuring they can collaborate seamlessly and that they have a trusted, shared source of truth that gives them the knowledge they need to make the right decisions.
Reach out to learn more about how VTS can partner with you to transform your data into the knowledge your teams need to make better decisions about space.
