- July 17, 2024
- by Wacads Group
- Industries
- 0 Comments
Three Perspectives on How AI Will Transform Real Estate
In JLL’s 2023 Global Real Estate Technology Survey, AI and generative AI were ranked among the top 3 technologies that were expected to have the greatest impact on real estate over the next three years by investors, developers and corporate occupiers.
Increasing AI into daily functions like investment management; design and construction; or building and facility operations improves efficiency and cost-savings.
Below is a snapshot outlining how AI will transform the industry.
AI Boosts Productivity
A common concern for AI is that it will replace human roles. However, according to reports from Goldman Sachs and Microsoft, AI will actually present new positions as a result of this technology.
Microsoft CEO Satya Nadella confirms this: “AI service providers are making the conscious choice to explore a human-centric approach…On an aggregated level, the increase in productivity is projected to augment global GDP by 14% by the year 2030.”
As a result of this technology growth, the result estate industry will most likely respond by building better energy grids, delivering net-zero buildings with high sustainability performances and underwriting AI processes for faster transactions at a global scale.
A common concern for AI is that it will replace human roles. However, according to reports from Goldman Sachs and Microsoft, AI will actually present new positions as a result of this technology.
Microsoft CEO Satya Nadella confirms this: “AI service providers are making the conscious choice to explore a human-centric approach…On an aggregated level, the increase in productivity is projected to augment global GDP by 14% by the year 2030.”
As a result of this technology growth, the result estate industry will most likely respond by building better energy grids, delivering net-zero buildings with high sustainability performances and underwriting AI processes for faster transactions at a global scale.
AI Drives Demand for Real Estate
The rise in AI will drive the need for more power, which will require more data centers or cooling facilities to meet these demands. Not to mention, the companies that are involved in creating computer parts, software or cloud services will become more common tenants in commercial spaces.
The 2024 JLL Global Data Center Outlook states that “to keep up with growing demand for computational power, hyperscale data centers are projected to increase their rack density at a compound annual growth rate (CAGR) of 7.8%.”
This growth in data centers will most likely center around already existing major tech hub locations such as the San Francisco, Boston, Seattle and New York.
AI Extends Early Adopters for PropTech
While it is reported that real estate leaders have the least understanding of AI compared to other technologies, over 80% of them reveal that they plan to increase their real estate technology budget in the next three years.
And, the good news is that PropTech has already created a solid foundation for these AI transformations. According to JLL’s research, there is now “technological solutions for almost every aspect of real estate functions.”
For instance, AI integration will provide solutions for projects like price modeling and prediction for investment management; reality capture for construction site monitoring; and scheduling for construction and capital projects.
Commercial real estate will only continue to feel the effects of AI as it rapidly expands and presents new opportunities. According to JLL, in order to stay vigilant, businesses must create tests, implement strategies and mitigate risks of data security to stay ahead of the curve.
– Ella Krygiel