The recent expansion of the use of AI, particularly generative AI (GenAI) and large language models (LLMs) like ChatGPT, requires businesses in all industries and their counsel to consider the best way to use AI to remain competitive. The real estate industry is a prime candidate for widespread adoption of AI to create efficiencies and improve performance. What makes the real estate industry a viable candidate for using AI?
Real estate transactions and management of real estate assets, particularly large commercial properties, require summarizing, analyzing, and maintaining a considerable amount of documents and data. This makes the real estate industry a prime candidate for the application of AI and, more specifically, GenAI, which is trained on large volumes of text.
In a document-intensive industry like real estate, an early application of AI was document automation. Once document digitization became more common, the commercial real estate industry recognized the benefits of streamlining document forms and reducing processing time. AI solutions can locate and make targeted revisions across multiple documents, improving quality control and efficiency. For example, when tasked with drafting a letter of intent, counsel can input basic deal terms (such as the purchase price, address, and party names) into an AI document automation system like Practical Law’s Automated Documents (powered by Contract Express), and within seconds those basic terms are populated into one or multiple form documents. AI solutions can locate and make targeted revisions across multiple documents, improving quality control and efficiency.
GenAI can also assist in: Evaluating and comparing target markets and properties.
Quickly summarizing voluminous due diligence materials, such as leases, third-party contracts, and title documents.
Streamlining document drafting.
Tracking key lease terms, upcoming deadlines, and other property information for property and asset managers.
What are the potential causes for slow adoption of AI by real estate professionals?
Like the skyscrapers that dominate city centers, real estate seems immovable and fixed. That permanence has been a hindrance to the adoption of AI because the rate of technological advancement moves much more rapidly than the planning, construction, and development of real estate, where the effects of city planning […]
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