Cushman & Wakefield unveiled what it bills as the industry's first tool to track artificial intelligence's effects on real estate demand as brokerages race to embrace efficiency and opportunities related to the technology.
The firm's new "AI Impact Barometer," released this past week, uses economic, capital markets and property indicators to help clients track how AI is influencing demand for data centers, warehouses and offices. Users of the tool can get a better idea where investment is flowing in real estate that supports AI.
The tool is designed to "cut through the noise and give clients a clear, data-driven way to see where AI is driving growth, where it is creating pressure, and how those forces are showing up in the built environment," Cushman & Wakefield Chief Economist Kevin Thorpe said in a statement.
"AI is no longer a future concept," Thorpe said. "It is becoming a structural force in the economy."
Executives for CBRE, JLL and Cushman — the world's three largest property services firms — have pushed back in the past week on the notion that AI poses a threat to the brokerages, a concern that caused some commercial real estate stocks to dip before some rebound.
The companies argue that AI has helped property services firms become more efficient by automating such tasks as drafting and extracting leases that support rather than replace human-based relationships and judgment to find and close deals.
"Make no mistake, AI will create winners and losers."
"Make no mistake, AI will create winners and losers," Cushman & Wakefield Chief Executive Officer Michelle MacKay said during the company's latest earnings call. "Winners will have embedded a culture of change that's not constrained by traditional operating models and ways of working."
Firms such as Cushman build trust and provide "relationship-driven solutions to their clients for complex problems," MacKay said.
AI benefits
Cushman and other firms are touting new AI-powered services and tools as investors question whether the technology is more of a threat than a boon to their broker-driven business models.
CBRE, the world's largest real estate services firm, uses AI to manage transaction and business data across the company, CEO Bob Sulentic said during the firm's earnings call.
Last year, the Dallas-based firm launched Ellis AI, a generative AI platform that provides digital assistants to help researchers sift through content and generate new reports, analyze supply chain contracts and generate sales leads.
"Historically, we have not been able to turn this enormous base of knowledge into a comparably large competitive advantage," Sulentic said. "With the use of AI, we are moving toward gaining advantages that are more in proportion to the data advantage that comes with our market position."
Chicago-based JLL several years ago launched JLL Spark, a venture capital arm that invests in "disruptive" property technology, CEO Christian Ulbrich said during the firm's earnings call.
"We have been acutely focused on both the opportunities and disruption risk associated with technology, including AI, for nearly a decade," Ulbrich said. "And we have been successfully embedding technology and building proprietary data sets across our core services throughout this time."
Outside the brokerages, venture capital firms are ramping up investments in property technology firms that are building AI tools.
Firms invested $16.7 billion in such firms last year, a nearly 68% jump from the prior year, according to an analysis by the Center for Real Estate Technology & Innovation, a property technology industry group.
Venture funding in such firms jumped to $1.7 billion in January, up from $615 million in the same month last year, according to the center.