Real Estate Capital USA Features Prophia in a Recent Deep Dive into AI Adoption

San Francisco, CA, April 18th, 2024 – In a recent article in Real Estate Capital USA, journalist Shihoa Feng interviewed CRE industry leaders about the future of AI in CRE business. The takeaway: The buzz about AI is on the rise.

From established groups like Cushman & Wakefield developing and implementing a proprietary AI model to data-centric lenders like TerraCotta Group, leveraging AI to help with investment strategies, machine learning models are steadily finding their footing among key players in the CRE industry.

As a leader in PropTech, Prophia has been beating the AI drum since 2018 when many of these advanced computing concepts were brand new. So when Feng reached out to our team to weigh in, we jumped at the opportunity to share the good word alongside major players in the industry.

It’s no secret that CRE has a data problem and the industry’s foremost organizations are among some of the most tech-averse in the business world. As a result of this tech hesitancy, many firms still rely on data practices that are at odds with tech innovation happening in other leading industries.

“Most commercial real estate firms’ [data] processes include Excel spreadsheets, shared drives, shared folders and sometimes filing cabinets,” commented Prophia’s Marketing Director, Kala Halbert. “What we’re trying to deliver is more accessible data [these companies] can trust.”

As a result of this tech hesitancy and slow economic conditions, CRE deals have slowed dramatically. Additionally, developers and owners have much less access to capital than they did in the past, causing many large firms to put a moratorium on investments in technology, ultimately, creating a vicious cycle.

But tech investments could help shake the CRE industry out of its malaise and inertia, building more economically resilient organizations in the process. “Introducing AI may help improve predictability for companies’ operations and reduce costs,” Chief Product Officer at ReAlpha, Jorge Aledoca, told Feng.

Additionally, solutions like Prophia that are trained on private data stand to vastly improve the quality of portfolio data, making it easier for organizations to mitigate risks and understand the current and future performance of an asset. This creates a level of transparency that could greatly help the CRE industry creatively overcome some of its looming issues and reinvigorate investment.

This optimism, however, has done little to sway the CRE industry as a whole, and the reasons are fairly nuanced. For one, many industry leaders are still trying to understand the legal ramifications of AI adoption. Additionally, the question of data security comes up frequently. “I think AI has a lot of potential that has to be handled with care,” Tingting Zhang of TerraCotta Group told Real Estate Capital USA. And finally, Cushman & Wakefield Chief Digital and Information Officer, Sal Companieh, succinctly added that whenever a data supply chain is disrupted, "there is work to be done”.

While there is an evident push and pull between CRE industry leaders and tech vendors, AI adoption is happening slowly but surely. The overall mood about AI is starting to turn more towards optimism as it becomes increasingly apparent that the benefits of advanced technology present an opportunity for CRE leaders to reinvigorate investment and change their data practices for the better.

About Real Estate Capital USA:

Real Estate Capital USA is published by PEI, the only global B2B information group focused on private real estate equity, private debt, infrastructure and agri investing. As these assets continue to grow in scale and significance, PEI is positioned to provide unparalleled business knowledge and intelligence to these communities.

About Prophia:

Prophia is the leading provider of AI technology for lease abstraction and commercial real estate data management. Trusted by top CRE investors nationwide, Prophia empowers landlords with real-time data and portfolio insights, providing a competitive advantage in mitigating risks and revealing business opportunities.