How AI is Reshaping Commercial Real Estate: From Creative Destruction to Smart Efficiency

 

 

 

 

 

 

 

 

 

How AI is Reshaping Commercial Real Estate: From Creative Destruction to Smart Efficiency

By Michael Bull, Host of America’s Commercial Real Estate Show

Artificial intelligence (AI) is no longer a futuristic buzzword — it’s rapidly becoming a driving force behind transformation in every industry, and commercial real estate (CRE) is no exception. While our field has historically been slower to adopt new technology, the momentum behind AI is impossible to ignore.

To help us unpack what’s happening, I recently welcomed Xander Snyder, Real Estate Economist and Data Scientist at First American Financial Corporation, to America’s Commercial Real Estate Show. We explored how AI is changing the way we work, invest, and operate — and what that means for the future of our industry. 

 

Creative Destruction: The Economics of Innovation

Snyder began with an idea from economist Joseph Schumpeter — creative destruction — the concept that innovation constantly fuels capitalism by replacing outdated systems with more productive ones.

“Innovation is the fuel of capitalism,” Snyder explained. “In the long run, it boosts productivity and efficiency. But in the short term, it disrupts existing workflows and technologies.”

In other words, AI’s rise will likely bring both opportunity and disruption to CRE — rewarding those who adapt early, and challenging those who don’t.

 

AI and the Economy: The Big Picture

When we zoom out, AI’s potential impact on the economy is enormous. Any technology that boosts productivity contributes to GDP growth.

“In commercial real estate,” Snyder said, “AI could remove some of the market friction and information asymmetry that defines our industry.”

Think about that — a world where property data, investment analysis, and deal information are more transparent and accessible. That means faster, smarter decisions, and potentially more efficient markets.

 

The Job Market: Disruption and Opportunity

Of course, with automation comes anxiety about job losses. I shared that one of my clients replaced seven employees with AI — and saw tasks being done faster and more accurately.

Snyder acknowledged that displacement is part of the process but reminded us that new roles will emerge. “There will always be demand for people who can effectively wield these tools,” he said. “The disruption is coming — the question is what replaces it.”

And interestingly, some companies that rushed into automation have had to rehire staff after realizing AI wasn’t as advanced or foolproof as expected. Balance and oversight remain key.

 

Smarter Due Diligence: AI in Investment Analysis

One of the most promising areas for AI is investment due diligence. Instead of combing through hundreds of offering memorandums manually, investors can now use AI to analyze and summarize documents in minutes.

“If you feed multiple OMs into a large language model,” Snyder said, “you can model those investments faster and flag red flags automatically.”

However, he cautioned that AI isn’t perfect. It can overlook nuances or produce “hallucinations” — confident but incorrect answers. The trick is using AI as an assistant, not a replacement, for human judgment.

 

AI for Market Research and Deal Sourcing

Another game-changing use of AI is in gathering and synthesizing market information.

Snyder shared how AI tools can scour public records, municipal databases, and online listings to find distressed properties or potential deals before others spot them.

The upside? Faster research and broader pipelines.
The downside? Not all data is reliable. Snyder once asked an AI to find top Midwestern multifamily markets — only to discover it had misinterpreted growth rates.

Lesson learned: always verify the data.

 

Operational Efficiency: Buildings That Think

Beyond investment analysis, AI is now being used to run buildings smarter.

Imagine systems that detect leaks, adjust energy use in real-time, and predict maintenance before costly breakdowns occur. These tools can increase rent, lower expenses, and improve NOI — the holy trinity of operational success.

Still, change can be uncomfortable. Commercial real estate has long been a “get rich slow” business, with steady, proven workflows. Introducing AI means challenging habits and rebuilding trust in new systems.

As I joked with Xander, “If my team uses AI to do lease abstracts and I still have to double-check every word, why do I need AI?”

The answer? Because soon, you won’t have to — but right now, diligence is still essential.

 

Leasing, Compliance, and the Hidden Potential of AI

AI’s potential doesn’t stop there. Picture this: a system that tracks all your leases across multiple properties and automatically flags upcoming renewals, expansion options, or exclusivity clauses — so nothing slips through the cracks.

For landlords and portfolio managers juggling hundreds of leases, that’s a game-changer.

As Snyder noted, “Someone will still need to take responsibility for the work. You can’t just say, ‘AI did it.’ The new skill will be assessing the data AI provides — not collecting it manually.”

 

From Cigar Chats to Superpowers

On a lighter note, I shared a story with Xander. One night, while enjoying a cigar, I asked ChatGPT, “Why is Michael Bull a good person to sell my office building?”

The response pulled from my background and even offered a selling point I’d never used before. I tried that line with a client the next day — and won the listing.

That’s the magic of AI when used creatively: idea generation, time savings, and new ways of thinking.

“It feels like having superpowers,” Snyder laughed. “But because AI speaks with such confidence, we must stay cautious and verify everything it gives us.”

 

Final Thoughts: Lead, Learn, and Laugh

So where does this leave us? AI isn’t perfect — but it’s powerful. It can enhance productivity, uncover new opportunities, and streamline how we operate. But it can also mislead, confuse, or create new inefficiencies if adopted too quickly.

As Snyder put it, “Be aware of how far along AI really is. Implement it thoughtfully, test thoroughly, and remember that people are still responsible for the outcomes.”

Here’s my takeaway: those who learn to lead, learn, and laugh through this AI evolution will be the ones who thrive.

 

Want to stay ahead in commercial real estate?
Visit commercialagentsuccess.com for proven training, or connect with me at michael@bullrealty.com.

Until next time — keep innovating, keep improving, and keep your eyes on the opportunities AI is creating every day.