Chris Davies has never overseen a commercial real-estate transaction exceeding \(10 million in value. However, an executive at a publicly traded apartment owner recently reassured him that when they have a \)50 million property to sell, he will be among the brokers under consideration. This exclusive story is accessible only to Business Insider subscribers. If you wish to read further, consider becoming an Insider or logging into your existing account.
Davies acknowledges that it was not his qualifications, charisma, or connections that led to this potentially lucrative opportunity. Surprisingly, it was not even him personally— the executive was captivated by Davies’s chatbot.
In the commercial real-estate sector, known for its slow adoption of new technology, many professionals have embraced AI tools to streamline tasks such as drafting marketing content, analyzing leases and legal documents, and sifting through vast amounts of data.
Just over a year after the introduction of ChatGPT, artificial intelligence is progressing beyond routine functions, and brokers like Davies are starting to integrate this technology more directly into the fiercely competitive realm of commercial property sales.
Their initial endeavors demonstrate how this new software could assume a more client-facing role in real estate, potentially transforming an industry traditionally reliant on human interaction, relationships, and expertise. This shift hints at both the opportunities and challenges posed by such a radical transformation.
According to Davies, this wave of innovation is comparable to the advent of email or e-commerce, emphasizing that those who embrace and leverage AI will enjoy significant advantages in the industry.
Brokers Leveraging Bots for Property Sales
Davies recently employed a ChatGPT-powered bot to support his efforts in selling a 20-unit apartment building in Edmonton, Alberta, Canada.
The bot engaged with approximately 300 potential buyers to whom Davies had sent the listing via email, handling typical queries regarding the property’s price, location, and unit details. Leveraging generative AI capabilities, the bot could also address more complex inquiries, such as projecting potential returns if rents were increased by a specific percentage and estimating financing costs at various levels.
Despite sounding rudimentary, Davies was impressed by the bot’s efficiency. While he typically anticipated around 50 responses from emailing a listing to 1,000 contacts, the bot successfully directed 76 interested parties to him from the targeted pool of 300. Within three days, the property was under contract— a process significantly faster than the industry norm.
Davies noted that the bot empowered clients by providing information promptly and flexibly, enabling them to inquire at their convenience without feeling hesitant about seeking basic details.
Several individuals displayed curiosity about interacting with this emerging technology. Davies recounted a conversation where an executive jokingly asked the bot if it could purchase groceries. Despite the deal’s insignificance to the executive’s company, Davies’ willingness to explore innovative tools left a lasting impression.
The founder of the Massimo Group, Rod Santomassimo, collaborated with Davies and other brokers to integrate AI into their operations. He envisions a near future where brokers will utilize bots for verbal interactions with clients, supplementing text-based exchanges.
Santomassimo anticipates that the brokers he works with will employ bots to discern qualified bidders from less suitable ones within the coming months, enhancing efficiency in deal-making processes.
He believes that AI assistants will soon become commonplace tools for sales professionals and executives across various industries, revolutionizing client interactions and business operations.
Equipped with vast datasets and the ability to communicate convincingly, bots might soon provide real-time property details to clients, contact numerous property owners to gauge interest in selling or buying, and even assist in selecting winning bidders and negotiating deal terms.
Despite potential limitations of AI, regulatory bodies like the National Association of Realtors have minimal guidelines regarding its application in the industry, leaving ample room for innovation and experimentation.
Mixed Reactions from Industry Leaders
While some industry players are enthusiastic about AI’s potential, others, including major real-estate firms like CBRE, remain cautious.
CBRE introduced its chatbot, Ellis AI, to provide brokers and employees with a secure platform akin to ChatGPT, safeguarding confidential information from inadvertent exposure.
Sandeep Davé, CBRE’s chief digital and technology officer, mentioned that their brokers have not shown keen interest in incorporating AI into client interactions, focusing instead on leveraging AI for data analysis and business development.
James Nelson, leading Avison Young’s tristate investment sales group, highlighted the use of AI for market data summaries, proposal generation, and performance reviews. However, he expressed reservations about AI directly engaging with clients on his behalf, emphasizing the importance of maintaining personal connections in the business.
Despite the potential benefits of AI in real estate, concerns persist regarding its misuse, unpredictability, and ethical implications. Industry experts caution against AI bots behaving inappropriately or being exploited for fraudulent activities.
Embracing AI’s Inevitability
While some remain wary of AI’s expanding role in the industry, others view its integration as an inevitable progression.
David Dirkschneider, a broker specializing in apartment sales, utilized Santomassimo’s ChatGPT-powered bot to facilitate the sale of a 135-unit apartment building. Recognizing the efficiency gains and competitive edge offered by AI, Dirkschneider believes that embracing this technology is essential to staying ahead in the evolving real-estate landscape.
Despite acknowledging the potential challenges posed by advanced AI, Dirkschneider emphasizes the importance of adapting to technological advancements to remain competitive in the market.
As the real-estate sector navigates this transformative phase driven by AI integration, professionals are compelled to strike a balance between leveraging innovative tools and preserving the human-centric aspects that define the industry’s essence.
