People seem to fall into two distinct camps concerning artificial intelligence: embrace it now as quickly as possible or ignore it and hope it goes away.
Prologis CEO Hamid Moghadam is firmly in the embrace camp, likening it to the recent rise of AI to the transformative impact of e-commerce in the late 1990s on San Francisco-based REIT, the San Francisco Business Times reported.
Speaking at Prologis’s annual Groundbreakers event, Moghadam drew parallels to the decision to steer away from retail shopping centers as e-commerce gained momentum.
During the event, Moghadam stressed the significance of AI for Prologis, particularly in making informed decisions across its vast 1 billion-square-foot industrial portfolio. AI’s role, according to Moghadam, is pivotal in determining leasing terms, pricing, and other aspects of customer engagement.
“What are the big decisions we make?” Moghadam said, according to the outlet. “What do we charge for a lease, how long of a lease do we sign … basically, all of the decisions that go around leasing with customers. Now we’re using a lot of AI to drive those decisions.”
It enables Prologis to optimize its capital allocation, identifying prime locations for speculative investments and establishing EV charging infrastructure within its network, he said.
While the concept of AI in real estate is not new, the recent accessibility and viral launch of technologies like ChatGPT have accelerated the discussion.
The discussion of artificial intelligence isn’t limited to REITs. Residential agents, for example, have leveraged it to make them more efficient.
Nearly a year after ChatGPT forced generative AI to go mainstream, brokers in South Florida have figured out how to work the tech tools into their day-to-day operations. In addition to ChatGPT, agents are learning how to use platforms like Midjourney and Synthesia to do their jobs better, pick up the pace and save some cash, they said.
“I was blown away. I was in shock when I started using it,” said Patrick Lafferty, an agent with Compass’s Modern Living Group in Palm Beach. Lafferty started playing around with OpenAI’s platform in February, he said.
So far, the most typical use cases for AI in real estate are writing listings, generating marketing materials and reviewing legal contracts.
Meanwhile, proptech firms leveraging AI are largely concerned with accelerating processes. Silverwork Solutions automates the repetitive tasks that fall on mortgage brokers. While Redfin’s tech more readily connects site users with on-point property recommendations.
If deployed at scale, AI can also help tech-savvy developers revolutionize the way they find, plan and build projects. Some of the most ambitious products hold the potential to optimize entire cities through redesign.
— Ted Glanzer