RealAI Co-Founder Urges CRE To Embrace Brave New World Of AI

When fears over artificial intelligence caused stocks to plummet in February, commercial real estate firms faced two options.

One was to continue to behave as if the AI impact was exaggerated, even as several public CRE companies experienced a steep sell-off while people worried about AI’s effects on the jobs of brokers, analysts and other industry professionals.

The other was to embrace the change that AI has in store for CRE and take steps to stay competitive in the rapidly evolving technology landscape, which is what Ben Miller, CEO of Fundrise and co-founder of RealAI, recommends.

“You saw CBRE and other companies’ stock crash as the market recognized the change that AI represents,” Miller said. “It's imperative that real estate companies adopt AI because those who adopt early will ultimately win, and the ones who don't will probably get destroyed.”

Analysis, Augmented

Even the most seasoned CRE professionals cannot sort through and make sense of complex data as quickly as AI can, Miller said. When his company launched RealAI in January, Fundrise described it as the “ChatGPT for real estate.” 

One crucial difference, though, is RealAI goes well beyond the everyday uses of ChatGPT prompts and automates traditional research and analysis activities using more than 3.5 trillion data points relevant to CRE. It performs tasks required to underwrite deals or analyze multifamily tenant populations in a fraction of the time required by a team of analysts.

“It is the most advanced AI for multifamily real estate, and it replaces or augments the real estate analyst,” Miller said. “It lets you look at 100 times more deals, 100 times faster and 100 times cheaper, with more intelligence.”

Early users of RealAI, including Silverstein Properties, are already seeing the benefits.

“Analysis that once took days can now be completed in minutes, freeing our team to focus on higher-value work and enabling faster, more agile decision-making across the organization,” Silverstein President Tal Kerret said in a statement.

Moving From 'Pathetic' To Precise

RealAI uses two datasets to help users understand the multifamily market: One concerns property — rents, sales histories and so on — and the other is focused on people, which Miller said is a “radical change” for CRE.

“The real estate industry has never seen people data before,” he said, explaining that this includes information about consumers’ financial behavior and credit history. 

That’s old news for platforms like Google and Instagram, which use cookies and other tools to create a robust picture of their users, allowing advertisers to target an audience with precision. But until now, CRE has continued to make decisions using potentially dated information.

RealAI allows CRE professionals to peek under the hood of buildings they might want to acquire or neighborhoods where they might want to invest. It can provide real-time information on household incomes, credit scores or where people are moving to or from.

“It allows you to get down to the level of ‘12 people left this neighborhood and 18 people moved in during a selected time frame, and this was their average income and age,’” Miller said. “I can guarantee that Citadel and JPMorgan use this sort of data on a regular basis. Meanwhile, the real estate industry still uses census data, which is pathetic.”

Meet Your Copilot

Miller said another way RealAI allows CRE users to run a tighter ship is by providing deeper insights into the performance of not only properties but also property managers.

“If you ask it how a property manager or analyst is performing, you will get the brutal reality with nothing sugar-coated or masked,” he said. “If units are sitting vacant too long, it will tell you instantly instead of taking months for this to work its way through the typical chain of information at a CRE company.”

The tool is not afraid to deliver bad news, which Miller said can be a rare quality among humans. But that doesn't mean it will totally replace people either.

“There's no such thing as AI without a person. AI is ultimately a copilot.”  

As a result, he said, it is a valuable tool for analysts who are unafraid to present the unvarnished truth about a property to their managers.

“As a manager, that's the person I want to hire — the one who’s not afraid of risk and will come to me with a conclusion that is well reasoned and that they can defend,” Miller said. “That's also the person we built RealAI for.”

Fear — whether it concerns delivering bad news about a property’s prospects or embracing a new technology — is an obstacle that must be surmounted, he said.

“Fear of change is not a source of alpha for you,” Miller said. “You want to embrace change and be an early adopter and a change agent in your company. That’s how AI ends up affecting real estate. It's kind of up to us.”

This article was produced in collaboration between RealAI and Studio B. Bisnow news staff was not involved in the production of this content.

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