Unlocking The Power of AI: The Real-World Benefits For CRE

Increasingly aware of the advantages that artificial intelligence can bring to their operations, more commercial real estate professionals are embracing AI, cautiously.

In his frequent interactions with the CRE investor management community, Dealpath CEO Mike Sroka sees firsthand the industry’s growing comfort with AI. Sroka, co-founder of the investment and deal management platform, said he asks participants at conferences and customer panels whether they use AI in their personal or professional lives.

“One year ago, maybe 30% of the audience would raise their hands,” he said. “Today, 100% of the audience raises their hands.” 

That is a dramatic change, but it doesn’t mean CRE has gone all-in on AI — yet. Sroka said many firms still struggle to find the right AI applications and implement best practices around AI in their day-to-day work. This represents a massive opportunity over the next couple of years.

Dealpath Senior Vice President of Product and Design Rob Cain said clients and potential clients still have questions about AI, and more education will benefit customers interested in how these tools can improve their productivity and achieve the required levels of accuracy. Ultimately, firms need to feel comfortable with the result — a bar that he said the 10-year-old Dealpath can already clear for clients.

“Our clients are keenly interested in leveraging AI to extract data from documents like flyers or offering memoranda, or to do some initial analysis, but we need to do more to help them get comfortable with the technology and results,” Cain said. “The proof is in the output.”  

Bisnow spoke with Sroka and Cain about how AI adds value to the commercial real estate industry and why Dealpath’s AI Extract is different from what others offer. AI Extract enables users to build a comprehensive, proprietary database of deal and comparable data. This allows them to further centralize and standardize their deal, comp, property and asset data in a single system to inform the best investment decisions as well as saving time and money.

Sroka said a major advantage of AI for clients is that it can help them build a proprietary database of market data and a “single source of truth” by:

• Streamlining data capture, allowing them to screen more opportunities with greater accuracy.
• Capturing more comps to amass market intelligence and deepen their data advantage.
• Enabling them to spot and adapt to trends faster with multiple data points so they can identify and close the most promising deals.

No matter how far along a firm might be on its data journey, the first step is to follow best practices for efficient and accurate data capture. According to Sroka, gathering a critical mass of data can unlock deeper insights today while building a future-ready, interconnected platform and strategy for tomorrow's innovations.

“As new AI capabilities emerge, even more possibilities will come to light, allowing clients to develop a successful data strategy and invest smarter,” Sroka said. “For instance, firms will be able to run predictive analyses on which markets to invest in, detect data points that are considered anomalies and require closer human analysis, and identify patterns and receive recommendations about where to invest or other actions to take.”

And while some other software products on the market might be “vaporware” that don’t necessarily solve their users’ challenges, Cain said Dealpath’s engineering team developed and refined AI Extract to analyze an offering memorandum in less than five minutes, as opposed to a manual extraction process that can take half an hour or longer. 

Cain said Dealpath has taken a pragmatic approach to creating an AI product that delivers the accuracy and breadth that CRE investors demand to streamline deal processes and amass the critical volume needed for deep market analysis.

Data management has long been a challenge for investors and others in the CRE community. Now, with deal activity beginning to ramp up again, memorializing shareable and trustworthy data in a centralized hub is more important than ever. 

But Sroka said the “almost infinite flow of data” that lands in people’s inboxes makes that a daunting task. 

“Being able to smartly and efficiently collect that information, structure it in intelligent ways, glean insights and really take action from it is the name of the game now,” Sroka said.

To give them an edge in this new game, many are turning to AI tools to solve their data management problems and be more competitive.

“The level of interest in AI in this industry is through the roof,” Sroka said.

While people recognize that AI is an important tool for CRE, Sroka said it is important to understand precisely what the technology can do for them.

“Artificial intelligence is not the solution for every problem or need,” he said. “But it is well suited for some of the biggest challenges in commercial real estate, where it can be a powerful tool for extracting information out of documents and automatically generating reports.”

Numerous commercial investors and private lenders are taking advantage of Dealpath’s AI Extract to create an efficient method of collecting highly specific market data. This empowers them to make more informed investment decisions and close the right deals. Cain said this brings structure to what traditionally has been a slow, manual process.

“Teams historically worked from a myriad of different spreadsheets and systems,” he said. “But now our customers use us as their fundamental platform for deal screening, pipeline management, data extraction and deal execution.” 

Cain said Dealpath’s AI Extract differs from other software products because it is “true AI,” combining machine learning with large language models.

“The end-user experience is quite simple,” Cain said. “You just forward the email to a dedicated Dealpath address when you've received an investment offering from a broker, or you drag and drop a PDF into AI Extract. We then run it through our abstraction engine and pull out the salient data points. It starts their initial deal intake or screening process and saves a ton of time.”

The AI extraction process takes minutes, allowing users to concentrate on more pressing matters, such as dealmaking.

“With the market opening back up, deal teams are busy again,” Sroka said. “Investment professionals' time is valuable, and even sending some of this work offshore for managed services adds up quickly and ends up being quite expensive. With Dealpath’s AI Extract, it is a fraction of the time and cost, more accurate than skilled professionals and infinitely scalable to accommodate whatever information flow is coming through.”

As more CRE firms come to understand the benefits of AI, Sroka said he expects more people to raise their hands when asked about their use of the technology at work and the value being realized from it.

“There's broad awareness that things are changing and that this is an important tool in the modern tool kit,” he said.

This article was produced in collaboration between Studio B and Dealpath. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.