NAI Global: SIOR Corporate Brokerage Partner
“This time it’s different,” were the words about artificial intelligence and particularly, OpenAI’s new product, ChatGPT, an AI-powered large language model. The statement was made by the Founder and CEO (and also a former CRE broker) of a popular commercial property listing tool used by almost all brokerage firms.
The scene was NAI Global’s recent Leadership Summit in Washington D.C., where tech luminaries and experts mingled and gave presentations over a three-day meeting of NAI Global’s top executives with representatives from North America and numerous international markets. And the reference was made specifically about the various tech tools that have been introduced to commercial real estate in the past 10-15 years, all with the expectation that they would significantly disrupt the brokerage business as we have known it, and really haven’t. Rather, many of those tools have become just that, tools that enhanced brokerage services and are complementary to the business of leasing property or buying and selling assets.
Enter ChatGPT and for perspective, it took Netflix three years to acquire its first one million customers. For ChatGPT, that was accomplished in five minutes.
In the breakout session, Everything You Need to Know About ChatGPT (AI), it was made clear that ChatGPT would be a significant disrupter to not only commercial real estate, but across all sectors of industry. On a side note, to this point, iconic venture capitalist Vinod Khosla was recently asked if AI would bring Utopia or Dystopia to the world, and his answer was the former, even if one quote was a bit frightening: “I believe AI will be able to do, within 10 years, 80% of 80% of the jobs that we know of today.”
Yet two of the presenters at NAI Global’s Summit were not pessimistic about AI’s impact on CRE services. Instead, they said that it just makes us far more efficient, and much, much faster. When one of the men said that “no one has an information problem – we have an information filtering problem,” it was an ‘ah ha’ moment for many in the audience. Think of the ability and again, the speed and efficiency AI can provide. It’s like a marketing department, personal assistant and analyst all rolled into one, performing at the highest level to deliver and render services that we do all the time in commercial real estate.
For example, with Offering Memorandums, we routinely include area maps associated with the subject property (that is being offered for sale). These maps show nearby restaurants, markets, highways and other landmarks, all of which have to be researched and documented by a person. Someone with some previous experience and local market knowledge can produce that page (or pages) in a couple of hours. With ChatGPT, it is done in minutes.
A similar slide showed a proforma, with numbers and narrative of the investment analysis. Anyone that has done a detailed proforma knows it can take a small team a couple of days to produce good analytics and generate an informative and professional document meant to summarize an investment opportunity. With ChatGPT, the numbers had to be entered into their respective columns and the machine did the rest.
Once the session went into Q&A, Karl Landreneau, SIOR, with NAI Latter & Blum in Louisiana, shared that his office is already using ChatGPT, foremost as a library of terms and definitions associated with commercial real estate, so that any of his agents in the field can tap their phones to solve a problem. The example he offered was how to read a purchase agreement. He also said that they are experimenting with using AI for business development. For example, he asked AI to identify the top 10 banks in his region that are engaged in REO banking, who the banks’ leaders are and how to contact them. In 20 minutes, he had 10 new prospects to call. Landreneau has also used the technology to determine the net present value of a lease, saying that “the information was excellent, but we still need a broker to explain it to a landlord or tenant.”
Famously slow to adapt and utilize technology to its fullest, with AI and ChatGPT, the commercial real estate industry should take notice early and get on board, or otherwise be left at the proverbial station.