AI: Buzz Word or Powerful Potential?

“The integration of AI technologies facilitates a more dynamic approach to asset management by enabling real-time data analysis and predictive maintenance, thus reducing operational costs and improving asset longevity.”

Andy Doyle (CPO, Utopi)

Artificial Intelligence is arguably the buzz word of this decade. When it comes to modern technology, and modern innovation, AI is considered in all aspects of sustainable growth, productivity, and quality management. It’s discussed at conferences, it’s always a go-to topic at PropTech events, and always seems to be the topic on the minds of the sector’s most innovative. But has the promise of its greatness really come to fruition in the real estate sector or is it becoming more of a buzz word than a tool for real efficiency? Or is that just a mere after-effect of a lack of understanding for what and where AI can (and should) be used?

We breakdown some positive examples of AI in the context of real estate and scope out what could be ahead for AI in the sector. One thing is for sure, we’ve only scratched the surface of what’s possible for artificial intelligence in property, and with over $630 Million invested in AI-powered PropTech in the US alone in 2023; there is exciting things on the horizon.

“AI is seen as a game changer by real estate professionals, but understanding of its capabilities is still low.” (JLL)

AI and Productivity – An essential area for understanding.

AI is around us in our everyday life, sometimes more so than we realise. Alexa is AI – and can anyone remember life without her? Chat GPT – arguably the most progressive time-saving tool known to professionals around the world. And we all know it! But a key reason for this constant back and forth with the idea of AI, is the threat it causes humans and the jobs it could take away from us. We’ve all asked the question ‘will a robot take over my job?’, well not necessarily. Will it make you more productive, however? Absolutely.

JLL published research on AI, entitled ‘Artificial intelligence - implications for real estate’ they broke down the nuances of humans versus productivity and where AI sits in this equation:

“When technology allows fewer people to achieve the same productivity level, more people are freed to create new areas of opportunity. Goldman Sachs draws on a study by MIT economist David Autor to reveal that more than 85% of employment growth in the U.S. over the last 80 years is explained by the technology-driven creation of new positions.

Additionally, according to Microsoft CEO Satya Nadella, AI service providers are making the conscious choice to explore a human-centric approach, developing “co-pilot” products designed to assist people, as opposed to “auto-pilot” products that aim to entirely replace human roles. This positions AI as a significant productivity booster. On an aggregated level, the increase in productivity is projected to augment global GDP by 14% by the year 2030.”

So, if AI isn’t just here to take our jobs, and we know it can vastly transform our productivity and therefore opportunity; is anyone harnessing it in the context of real estate to really showcase its potential?

We’ve broken down some strong examples of AI at play in Property.

AI in Action.

1.        AI and Predictive Property Valuations (Sendient AI).

Sendient can work with real estate agents to gather structured data such as historical property sales data, market trends, and neighbourhood demographics to provide predictive property valuation models. By applying machine learning algorithms, AI platforms can accurately forecast property values, identify pricing trends, and identify investment opportunities.  AI-driven valuation models can analyse comparable property sales, property features, and market conditions to generate accurate property valuations in real-time. By leveraging structured data, estate agents can improve pricing strategies, negotiate better deals, and maximise returns on property investments.

2.        AI and Quick Deal Making (Keyway).

Keyway brings technologies like AI and machine learning to commercial real estate to make data-informed deals quick and efficient through its investment platform. The company works with sellers in the healthcare sector — private practice doctors, dentists and veterinarians — as well as multifamily property owners, offering them service models like rent-to-own and transition out.

3.        AI and Enhanced Communications (Hyro).

Hyro builds conversational AI that can be used for the real estate industry. Its AI chat and voice interfaces can be available to customers when live agents are not. They’re capable of helping to match customers with properties, schedule viewings, capture and follow up on leads and answer customer questions based on consistently updated information.

4.        AI and Single-Family Homes (Entera).

Entera brings its customers a residential real estate investing platform that uses AI to enable automations and intelligent analytics for finding, buying and operating single-family homes. The company services more than two dozen U.S. markets, with its platform seeing upwards of 1,000 transactions each month.

5.        AI and Asset Valuations (Quantarium).

Built on scalable cloud infrastructure, Quantarium’s AVM features deep learning algorithms that have processed data on more than 153 million property parcels in the United States. Mortgage lenders, construction companies and other real estate professionals rely on its valuations of commercial and residential properties. 

Where we see AI and PropTech going? Data.

When considering AI and how transformative it could be for the real estate industry, you have to first consider GenAI specifically. Chat GPT being the best example in popular culture, GenAI can create new content based on data it has been trained on. Meaning research, modelling, written content, etc can be done at lightning speed. But how can that be harnessed to really drive innovation?

We all know data is king, and in the context of real estate, without the knowledge of how people are living in these buildings, or how the buildings are performing to ESG regulations; how can the market really drive profits and achieve net zero carbon targets? Harnessing AI to solve the time, cost and accuracy surrounding data acquisition is the best way to transform the market:

“Real estate is one of many sectors that could transform itself with GenAI. Real estate companies have faced an operating environment where it is challenging to attract and retain talent, meet increasing investor demands and keep up with technology trends, such as advanced data and analytics and smart buildings. In addition, real estate companies do not want to have to scale their costs in line with growth of assets under management. GenAI has the potential to help address all these challenges.” (EY) 

Asset management is an area where GenAI can have a huge effect on productivity and information gathering. It can give asset managers the tools necessary to collect and analyse property-level data more effectively. This will lead to enhanced budgeting and forecasting: ‘There is also the potential for GenAI to be used in leasing, ESG reporting, capital planning and risk identification. Reporting and scenario planning can be streamlined’ (EY) And that’s where Utopi enter the conversation. Bridging PropTech and data solutions, and enabling the property sector to gain real-time, granular data on building performance via wireless networks in a matter of minutes, Utopi always aim to deliver the most accurate data solutions at pace, and at scale.

We asked Andy Doyle, Chief Product Officer, at Utopi for his thoughts on AI and how Utopi fits into this ever-evolving landscape of innovation:

“The integration of AI technologies facilitates a more dynamic approach to asset management by enabling real-time data analysis and predictive maintenance, thus reducing operational costs and improving asset longevity. AI-driven analytics can also profoundly influence ESG compliance, providing detailed insights into energy usage, waste management, and occupant behaviour. This not only helps in achieving sustainability targets but also in enhancing tenant satisfaction through personalised experiences and improved living conditions.

Additionally, AI can streamline complex decision-making processes by synthesising vast amounts of IoT-generated data, offering a strategic advantage in portfolio management and investment decisions. And this tailored approach ensures that property managers and developers can maintain a competitive edge while adhering to stringent ESG criteria, shaping a more efficient and responsive real estate environment.

Utopi data can already be used to deliver these insights and we’re working hard on automating this analysis, creating automated energy controls, developing automated benchmarks and targets based on our whole portfolio (over 9 billion environmental data points, and growing) so that we can predict the performance of assets and help set targets. But the future looks bright for AI, and Utopi are keeping our finger on the pulse to ensure we always optimise our product solutions for quick, quality results.”

It’s safe to say AI is still in its infancy in terms of what is possible – the sky really is the limit here. But what we do know is with an enhanced understanding of the possibilities and enhanced productivity a definite, the real estate sector will continue to push the boundaries of innovation. I guess all we can say for now is, watch this AI space!