Artificial Intelligence and Commercial Real Estate
By Bill Adams, President, MBA, CCIM, CRB, ALC
The most visible impact of Artificial Intelligence (AI) on commercial real estate has been the proliferation of data centers around cities like Atlanta, other major metropolitan areas, and even rural areas. These centers provide construction jobs and enhance the local tax base. The biggest controversy surrounding these projects is their impact on the electrical grid. AI uses lots of electricity!
Artificial intelligence is predicted to have a negative effect on the labor force and be used in many nefarious ways to replace or harm humans. Among its positive benefits is that it is supposed to make work life easier for all of us. I recently used demographic data and AI to analyze a site.
A month ago, we listed a two-acre property within the City of Atlanta. As a member of the CCIM Institute, I have access to a demographic program called the Site to Do Business, powered by ESRI, the global leader in GIS development. The program allows one to analyze a geographic area to determine, among other things, population, average household size, average household income, and age of the population. This program has a Tapestry data function which classifies an area into sixty unique segments based on demographic and socioeconomic characteristics. Each Tapestry has a cute name and gives you an insight into that cohort. For example, under the “Tech Trailblazers” category “Laptops and Lattes” is described as “Singles Living Alone, Married Couples with No Kids, Multi-Units” These folks “Tend to shop online, spend on travel and entertainment, listen to podcasts, read books and are health conscious.”
AI can take the tapestry analysis a few steps further. Using tapestry analysis and adding restrictions such as zoning, artificial intelligence can give a developer a good idea as to the highest and best use of a site. In the case of our site, which has a “mixed retail/residential use” zoning, AI was able to drill down to determine what kind of retail uses would work best at this location.
Based on the tapestry characteristics and zoning, AI was also able to offer several options for the residential component of the site. Whether these AI suggestions work in real world development remains to be seen. However, the marriage of artificial intelligence and good demographic data is a great starting point for a developer contemplating acquiring land for development.
Our team is always standing by to answer any real estate questions you have and to support all of your real estate needs. We’d love for you to be in touch.