AI Becomes Real Estate’s New Landlord

With office spaces sitting empty and real estate markets in flux, artificial intelligence is transforming how buildings are managed and how investors forecast trends.

Observers say AI improves commercial real estate management by monitoring office use and forecasting maintenance requirements. It offers more efficient approaches to space management and cost optimization.

“AI is fundamentally reshaping how we approach space utilization, especially as hybrid work reduces demand for traditional office spaces,” Frank Cartwright, head of social housing investments at Yield Investing, told PYMNTS. “For CRE investors, the key is to adapt, and AI allows us to reimagine these spaces in new ways.”

Innovating Space Use

The AI real estate transformation goes beyond repurposing office areas. At Butlr, an MIT spinout, AI combined with body heat-sensing technology offers insights into office use. The company’s sensors capture data on foot traffic, occupancy and even subtle movements like chair rollbacks, Butlr CEO Honghao Deng told PYMNTS. Companies like Verizon, Microsoft and Netflix use these sensors to decide office layouts and resource allocation, determining if they are overpaying for cleaning in underused areas.

“When individuals squat in conference rooms, it drives up energy costs and signals that the office doesn’t have the right ratio of private-to-public meeting space,” Deng said.

AI’s reach in commercial real estate goes beyond optimizing office layouts. Carla Hinson, vice president at PropTech firm MRI Software, pointed to two applications: lease abstraction and facilities management.

“Lease abstraction tools gained prominence during the pandemic when companies needed to locate force majeure clauses quickly,” Hinson told PYMNTS.

Today, AI streamlines document analysis, saving time on tedious legal reviews. On the facilities side, AI anticipates equipment failures and optimizes maintenance.

“This predictive capability is essential for expensive systems like HVAC units,” Hinson said. “AI helps predict asset failure and manage maintenance costs.”

Cartwright said Yield Investing uses AI to monitor building systems, ensuring efficient energy use and reducing costs, particularly in sustainability efforts. AI’s analysis of energy patterns also supports the conversion of underused office spaces into flexible housing or mixed-use developments.

Planning With AI

AI’s strength in analyzing datasets makes it valuable for risk mitigation and strategic planning. Brittany Hart, CEO of Salesforce consulting firm Platinum Cubed, told PYMNTS that AI helps companies navigate market challenges by assessing various scenarios, such as fluctuating demand and underused properties.

In space optimization, AI-driven tools help reimagine office layouts for hybrid work, offering flexible workstations and shared collaboration areas, Hart said.

“AI allows real estate operators to make strategic decisions based on data-driven forecasts of market trends and tenant activities,” she said.

AI’s capabilities are particularly beneficial in complex regulatory environments like social housing.

“AI automates lease abstraction and compliance checks, ensuring accuracy and reducing administrative burdens,” Cartwright said.

He added that this automation enables Yield Investing to scale social housing projects more efficiently.

While AI offers benefits in workspace monitoring, privacy concerns naturally arise. Deng addressed this directly, explaining that Butlr’s sensors are designed not to capture personally identifiable information.

“The guaranteed anonymity fosters a more collegial work environment,” he said.

AI also improves services like room booking and space use with systems that recommend optimal seating or alert companies to inefficient usage patterns.

“Adoption of AI will increase as organizations and their IT teams learn more about use cases,” Hinson said. “The ‘fear’ of AI is fading as people become accustomed to using it in their personal lives, and we’ve reached a critical juncture because the technology has caught up with the concepts.”

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