When Barbi Reuter, CEO and Director of Cushman & Wakefield | PICOR Commercial Real Estate Services in Tucson, Arizona, went to write an opening statement for an annual awards show, she decided to open up the artificial intelligence chatbot ChatGPT to perfect her tone.
“I challenged, ‘Write a compelling opening for the CEO at the 37th Annual Awards Dinner,'” Reuter told CoStar News. “I opened our banquet with that and then confessed the source. The team was quite incredulous!”
Since OpenAI’s chatbot launched in November, real estate professionals across the country have been experimenting with it to help with tasks ranging from editing text to optimizing the tone of an email to an angry customer. But while executives and brokers are still exploring the many uses of AI – ChatGPT still has bugs and accuracy issues it’s working on – there’s a consensus that it has the potential to make some industry tasks easier.
Right now, the biggest benefit of AI is efficiency, according to commercial real estate industry professionals who engaged in a Twitter conversation on ChatGPT. Users said they asked it to check grammar and tone in marketing materials, property descriptions, letters of intent, and right of first refusal agreements, to name a few examples.
The technology can also help with lease reviews, comparing information to an agreed letter of intent and avoiding bias in favor of the landlord or tenant, users said. Additionally, it has basic coding capabilities and can perform data analysis to identify market patterns and risks.
Some industry experts project more significant capabilities into the future.
“In its current state, I see it as a tool to improve day-to-day efficiencies, but over the longer term, I think AI will transform the industry by eliminating repetitive and low-barrier jobs,” Bronwyn Scrivens, associate broker at Omada Commercial in Edmonton, Alberta, wrote in an email to CoStar News.
According to Kunal Lunawat, co-founder and managing partner of Agya Ventures, a San Francisco-based real estate technology fund, AI has the potential to transform the brokerage and property listing service sectors the most.
ChatGPT is not yet able to access real-time real estate data, but other AI technologies have the potential to greatly improve the search for real estate offers. For example, it could narrow a search to about 90% accuracy based on a client’s preferences, and then brokers could help select the remaining 10%, Lunawat said.
Cushman & Wakefield | Barbi Reuter, CEO of PICOR Commercial Real Estate Services, has used ChatGPT to communicate with customers and employees. (Women’s Network Commercial Real Estate)
Individual brokers, particularly the most technologically savvy, have been quick to jump on the ChatGPT trend, but it may take longer for businesses to embrace it. Although the chatbot has more than 100 million users, it has only been around for less than three months and it still has some major limitations.
OpenAI acknowledged that the bot can sometimes write wrong answers or get confused in what is called an artificial intelligence hallucination. Users have found that understanding of more recent events that have occurred since 2021 can also be muddled.
“There may be concerns about plagiarism and encouraging the ‘lazy’ tendency not to come up with ideas,” Scrivens said. “Commercial real estate companies should stay ahead of this technology and invest in learning the best ways for their employees to have the conversation while we all learn best practices together.”
CoStar News reached out to OpenAI for comment but did not immediately receive a response.
The importance of authenticity and personal connections, especially important in commercial real estate, could slow the adoption of AI, Lunawat and Reuter said. Professionals need to reflect a personal or corporate brand in their communications, which is often more consultative and less transactional than private.
“If we borrow someone else’s words and they don’t sound like our own, we dilute our credibility,” Reuter said.
However, as companies grapple with the ethics of AI, they could be missing out on major opportunities.
“There are billions of dollars of industrial value to be gained,” Lunawat said. “Any sophisticated brokerage house should think about how they can use some of these big AI language models as effective tools for their brokers.”
Real estate startups that are more adept at technology trends and less risk-averse could be ahead of big-name companies when it comes to adopting AI, Lunawat said. With an economic downturn and a general slowdown in trade transactions, many of the larger players may have too many other concerns to invest heavily in ambitious AI deployments.
It doesn’t help that the real estate industry has historically been slower to adopt new technology compared to other industries, said Casey Flannery, a senior associate at Foundry Commercial in Nashville, Tenn., who hosted an online forum about ChatGPT in February.
“We have to think creatively about how we would use it in our business and it’s a little hard to see right now because it’s so new,” she said.
Residential real estate marketplaces should think “deep and deep” about how to integrate AI if they want to stay relevant, as AI’s capabilities will only increase, Lunawat said.
Large language models like OpenAI’s Chatbox use reinforcement learning, which means it can become more accurate when working with a user to search for information. Other emerging AI prototypes can not only render multiple designs in minutes, but also predict emissions levels and material sourcing information.
“We haven’t even seen it yet [the next generation] GPT-4 has yet to come out,” Lunawat noted. “There are people in my portfolio who have seen it, who had early access, and they’ve been blown away by what it can do.”