Commercial real estate is experiencing a massive shake-up, thanks to the advent of artificial intelligence (AI) and big data. Not only are these technologies streamlining traditional processes, but they’re also enabling developers, investors, and property managers to make smarter, data-driven decisions. The application of AI and big data is transforming how commercial real estate projects are imagined, developed, and managed, according to real estate industry expert Dov Hertz.
The Potential of Predictive Analytics
Predictive analytics powered by AI is potentially the most encouraging commercial real estate innovation. Through big data analysis, AI can predict market trends, identify embryonic opportunities, and even anticipate potential pitfalls.
“Predictive analytics is a game-changer for real estate development,” asserts Dov Hertz. “It allows us to pinpoint the right locations, recognize demand patterns, and make more informed investment decisions.”
For instance, AI can examine population growth, employment patterns, and consumer habits and identify the optimal locations for constructing new properties. This enables developers to construct those properties that will be in sync with demand, thereby maximizing profits and reducing risks.
Simplifying the Development Process
AI and big data are also transforming the development process itself. From site selection to design and construction, the technologies can be employed to enhance efficiency, lower costs, and promote sustainability.
“AI helps us automate complex processes, like zoning and permitting,” says Hertz. “It can also optimize building designs to get the most space and energy out of them.”
Machine learning software can analyze architectural plans and suggest how to improve them, and construction management software powered by AI helps track progress, identify delays, and keep projects on track. Big data can also provide insights on material purchasing and labor costs so developers can budget more accurately.
Improving Property Management
In addition to development, big data and AI are revolutionizing property management. AI-enabled smart building technology enables property managers to manage and optimize energy consumption, enhance tenant satisfaction, and anticipate maintenance requirements.
“AI is not so much about making properties smarter; it’s about managing them smarter,” Hertz says. “With real-time information, we can maximize operations and make the experience easier for tenants.”
For instance, AI-based systems can track tenant usage to regulate light, heat, and air conditioning automatically to reduce energy consumption and cost. Predictive maintenance software can identify problems before they happen, reducing downtime and maintenance costs.
Challenges and Opportunities
While the benefits of AI and big data are clear, the implementation of these technologies is not without its challenges. Data privacy concerns, prohibitively expensive implementation costs, and technical requirements are obstacles that the industry must overcome.
But these obstacles also present an opportunity for innovation. Those developers and property managers who implement AI and big data first will be ahead of the curve in the rapidly evolving commercial real estate industry.
“The future of commercial real estate is for those who can evolve,” Hertz concludes. “AI and big data are no longer optional—they’re a necessity for staying ahead in this business.”
A Transformative Future
As AI and big data continue to evolve, their impact on commercial real estate development will grow. From site selection to managing intelligent buildings, these technologies are revolutionizing every aspect of the business. For developers like Dov Hertz, embracing AI and big data is not a trend but a paradigm shift that will determine the future of real estate.
Through the application of big data and artificial intelligence, commercial property is driving innovation in designing more effective, smart, and green developments, and setting new standards for the industry as a whole.
You may also want to read:
Dov Hertz of DH Property provides commercial real estate development tips on NEREJ NYREJ Podcast