Artificial Intelligence in real estate finance and development

Imagine a brain learning the meaning of pages and pages of technical and legal text by sight, all in a few seconds. Imagine it instantly retrieving this knowledge and building on it every time it reads a new document. That is what Artificial Intelligence (AI) can achieve. Consequently, AI tools will revolutionize the way some parts of the real estate industry work.

Faster and more accurate due diligence process

Due diligence in real estate can be a time consuming and precarious process of reviewing documentation for properties and portfolios, validating insurance, checking compliance obligations; essentially, identifying and quantifying areas of risk. The first wave of AI tools focus on literate analysis; identifying consistency from words and meaning, and summarizing inconsistencies across various documents. This will make due diligence processes faster and more accurate.

In our recent AI tool trial, the time used for data room searches was reduced on large real estate portfolios by 40%. And our portfolio transaction commission managers saved 20% of their time checking on draft report consistency. For real estate advisers, such tools will be particularly useful to improve quality control across portfolios, as they pick up key variances between reports.

Real estate professionals will focus on creating value

Ultimately, the impacts of AI & process automation on the real estate industry will be greater accuracy, speedier outcomes and less cost. Consequently, real estate professionals’ costly time and resource will be freed up to focus on more value-adding advice, rather than process-oriented advice.

Project and asset performance will be clearer

The second wave of AI tools will focus on numerical analysis and could perhaps be more revolutionary. When applied to delivering projects, or managing performance across a portfolio of assets, such tools could highlight varying project development or asset management and performance benchmarks. This could help provide accurate data to the hands of real estate owners, occupiers and sponsors of projects – and allow better investment decisions to be made.

Those with greater and earlier access to knowledge hold the key

Like the human brain, the more an AI tool experiences, the more knowledge it gathers. Therefore, investors, developers and advisors with involvement across larger portfolios and development programs will find they have a ‘knowledge differentiator’.

The Google bank is on the horizon

It is anticipated that technology companies will expand into banking as they digitalize the lending process and risk controls, buy in the real estate expertise and make full use of their large cash piles sitting on the balance sheet.  

AI’s arrival in the real estate industry marks the start of an exciting new era of real estate process innovation, directly benefiting investors and developers. And I believe this innovation in the industry will be one that sticks. 

Matthew Cutts

Global Sector Leader - Financial Institutions Ask me a question
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