The Inside Look with Xander Snyder - Episode 29

Artificial intelligence is becoming increasingly integrated into commercial real estate workflows, but trust in the technology remains a work in progress. In this episode of The Inside Look, Principal Commercial Real Estate Economist Xander Snyder explores new survey findings on AI adoption, common use cases, and where CRE professionals see the greatest opportunities for future value.

Hi, I’m Xander Snyder and this is First American’s Inside Look.

Artificial intelligence, or AI, has progressed to be even more than a buzzword. It’s an ever-present and perhaps increasingly difficult to escape presence that’s kind of looming over our entire economy.

So how, though, has AI uptake and adoption progressed in the commercial real estate industry specifically?

Well, First American’s Data & Analytics division conducted a survey to help answer these sorts of questions. For example, how many people are using it? Is it adding value? Do people trust it?

Let’s take a look at those survey results to learn more.

Let’s start with AI adoption.

According to the survey, 66% of direct commercial real estate respondents use AI at least weekly, and 42% use it daily. Among VP-level and above respondents, usage is even higher. Nearly 76% use AI either weekly or daily.

In other words, AI is beginning to become more integrated into the daily workflows of a meaningful share of commercial real estate professionals, including senior decision makers.

Though more commercial real estate professionals are using AI tools, that doesn’t mean that they really trust them all that much.

In fact, only about 5% of respondents say that they fully trust AI enough to let it influence their real and critical commercial real estate decisions.

So there’s a gap between usage and trust.

AI is helping people enhance their productivity, but the vast majority of them are nowhere close to letting it take over critical workflows sight unseen.

What about the different common use cases that AI is being used in most regularly?

Well, those include market research and comparable analysis, lease abstracting and document review, and marketing support.

In other words, AI is helping with tasks that improve efficiency but still leave judgment to the human user later in the process.

Looking ahead, respondents say that they want AI to play a larger role in their transaction process.

The top future use case was replacing manual steps in transactions and closings, followed by generating more reliable sales and rent comps.

So more commercial real estate professionals are using AI, but they don’t fully trust it quite yet. And so they’re using AI in ways that still allow for substantial human judgment in their daily workflow.

Now, it’s worth mentioning that there’s a good deal more information contained in First American’s survey than I’ve been able to cover in this episode. So we’ll be sure to include a link to that survey in the notes to this video.

Thanks for watching this episode of The Inside Look. We’ll see you next time.