2023 Fall Issue of Urban Land - 29

Enter Generative AI
Emergence and
implications in real
estate capital markets
Artificial Intelligence (AI), or
the general ability of computers
to emulate human thought
and learning processes and,
ultimately, to perform tasks
in real-world environments,
has grown and evolved significantly
in recent years. It's
an empirical fact: in 2022, the
global AI market swelled to
$136.55 billion, with projections
hinting at a surge of $1.8 trillion
to $2.6 trillion within the
next 10 years.
The banking, financial services,
and insurance (BFSI)
sector has also embraced
AI. Anticipated to hold a significant
33.9 percent market
share by 2030, this sector is
primed for growth in coming
years. AI's increasing
presence in banking spans
various functions, whether
account inquiries and loan
applications or more advanced
roles such as fraud detection
and credit score monitoring.
Amid this surge of AI technology
adoption, a useful
array of tools has emerged,
ones becoming ever more
advanced and even more
accessible. Such tools include
natural language processing
(NLP); deep learning; machine
learning; neural networks; and,
notably, generative AI.
Generative AI is distinct
from other AI tools and is
primarily used for content creation,
be it imagery, text, computer
code, video, or other
forms of output. Although the
terms AI and machine learning
are often used interchangeably,
it's important to note
that machine learning is actually
a subset of AI, one that
describes the technologies
and algorithms which enable
systems to identify patterns,
make decisions, and improve
through experience and data.
Firms active in real estate
capital markets are already
employing generative AI to
enhance operations at all levels
of the transaction process-a
foregone conclusion as generative
models, such as GPT,
LlaMA, and BERT, are constantly
improving and being
incorporated into user-friendly,
no-code platforms. Chat-based
tools such as ChatGPT have
revolutionized content creation
by streamlining tasks, including
producing copy for marketing
campaigns and drafting
emails; such image-generation
AI tools as Midjourney enable
lightning-fast and cost-effective
rendering of visuals.
With financial and real
estate technology providers
increasingly integrating AI
components into their platforms,
users benefit from more
holistic and relevant analytics,
and can more easily troubleshoot
issues, import and
export information, and even
execute customized workflows,
Private Investment in AI by Focus Area, 2017-2022
if necessary, among many
other benefits.
AI lead generation
Some of the real estate industry's
major players are launching
their own AI-powered
tools for lead generation. JLL,
for example, through a collaboration
with multinational
technology firm Nvidia, has
been integrating generative
AI into a product offering to
optimize internal workflows
and client processes, in quest
of enhancing transactions and
decision-making. JLL's tool
crunches large volumes of
carefully cleaned public and
proprietary data to offer assistance
with transaction management
and lead generation,
based on portfolio characteristics,
to clients who opt in to
the service.
Yao Morin, JLL chief technology
officer, explains: " Similar
to how you use a software
application on your phone,
you use algorithms to generate
leads and surface leads
and insights in the user interface. "
The tool's rapid uptake
and impact to date is thought
provoking: " One in five transactions
in capital markets was
[affected], " says Emilio Portes,
global head of capital markets
innovation and capital markets
quants at JLL.
Portes and Morin emphasize
the importance of transparency,
of doing the homework
that cleaning input data for
models entails, and of staunch
adherence to ethical standards-particularly
around
data privacy and security in
using AI for lead generation
and enhanced transactions.
LIAN PLASS is a senior manager for
ULI's Urban Resilience program.
Source: NetBase Quid * Adapted from NetBase Quid data featured in the Stanford Artificial Intelligence Index Report (2023)
FALL 2023
URBAN LAND
29
DEVELOPMENTS
2023 Fall Issue of Urban Land

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