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Navigating AI Adoption in Commercial Real Estate: Key Considerations and Challenges
The TermSheet Team
Nov 2, 2023
As technology advances, industries and professions have to adapt to keep up. In the world of commercial real estate, AI is already being used to streamline processes such as lease management, building maintenance, and even site selection. However, adopting AI in the workplace is not without its challenges. Keep reading to discover what you need to be considering and looking out for when thinking about implementing AI into your real estate operation.
One of the primary considerations when adopting AI in any industry is data management. The first challenge is collecting and organizing all the relevant data in order to train AI models. The accuracy and efficacy of AI models depend mostly on how comprehensive and accurate the data is in the first place. However, it's not enough to just collect relevant data. You also need to ensure that your data remains protected and compliant with industry regulations. Maintaining data accuracy and integrity is crucial to successful AI integration in commercial real estate.
Adopting AI comes at a cost, and it's important to consider the financial implications of integrating AI into your operational practices. Even if you decide to outsource the development of your AI tools, there will be additional ongoing costs for maintenance, training, and updates. But the potential benefits of AI-powered commercial real estate, such as faster and more accurate site selection, lease management, and maintenance records, far outweigh the costs for many professionals.
The integration of AI in commercial real estate will also call for changes to workflow, which can be a challenging obstacle. Some professionals may feel hesitant to abandon their current tools and methods, even if those tools are outdated or inefficient. It can be tough to adjust to new workflows that require different skill sets and tools, but with proper training and support, the transition will be less daunting.
As AI adoption grows, it's important to keep in mind ethical concerns. Commercial real estate professionals must ensure that the AI tools they use are not only effective, but also fair and unbiased. This helps to address the issue of discrimination in real estate and accounts for the diverse populations in the market. Real estate professionals should also consider how AI might affect privacy, security, and data protection. They should work to ensure that data is not being collected or used in any way that could be seen as unethical.
Integration with Existing Systems
Integrating a new technology into your existing systems is never a straightforward process, and AI is no exception. When selecting an AI tool or system, it's important to ensure that it can be integrated into your existing systems and tools. This requires a thorough analysis of your current systems and the software and hardware you currently use. Ensuring a smooth integration is vital to ensuring that your workflow isn't impeded or negatively affected.
AI technology offers immense potential in commercial real estate, but it's not without its challenges. Real estate professionals who want to implement AI into their workflows need to consider aspects like data management, cost-benefit, workflow change, ethical concerns, and integration with existing systems. Addressing these challenges comprehensively and working with experienced AI vendors is a wise approach to successfully weaving AI into your business. It's important to recognize that AI isn't here to replace human expertise and experience but to enhance and streamline human decision-making processes, making navigation of the commercial real estate landscape more efficient than ever before.
To discover TermSheet’s very own AI solution for real estate investors, ETHAN, request a demo with a member of our team.
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