(AI) Artificial Intelligence Is Not The Commercial Real Estate Future.
I sit in front of my computer and Google: Office Space Chicago. Up pops several generic companies.
I click on Maps and zoom into a specific area of The Loop that I am interested in. I click Earth and then 3D.
Moving my finger around the pad, I focus in on one specific building. It’s near The Willis Tower, and I click on the address.
It shows me a property specific website that has all the basics. Pretty pics, information about the owners and what is available to lease. I click on one of the 20,000 +sq ft spaces. Up pops the PDF and then something else. It shows me three potential layouts of the space in 3D. At the bottom, it has a box pop up that asks me a couple of questions.
- Which one of the three layouts do I like best?
- If the one I like was already built when would I be ready to move and what is my expected budget?
- Is the existing email I have the correct one to send the contracts for occupancy?
I answer back that I like the second one because it shows flexibility and openness. If available and on time I could move in less than six months. And yes that is the correct email and could they also send copies to my real estate attorneys.
The box pops up again and says that the information has been sent and if the terms are agreed to the space can and will be ready within a one month window to move in. I ask how they could do it that fast. The reply is that permits are already approved, and the process is automated so all timelines will be easily met. I ask if my attorneys have any changes who should they contact? The response is that the attorneys should respond back to the email sent with the contract. I ask if there is a specific person to contact. The response is that all negotiation will be handled via the email mentioned.
The next day in my inbox is an email from one of my attorneys asking for a phone call. Now I have been on this planet for a while, and attorney calls mean dollars spent talking, so I ask what he wants. He responds he just wants to discuss the deal that he did not know I was involved in until yesterday. I respond that it’s just a basic deal, and the terms seem pretty solid. He responds that he tried to get a phone number of someone to talk to but only got an answer from an email. I respond again that the terms are solid and what specifically does he need. He says he wants a human to talk to to get the real terms of the deal. He says he will get to someone at the company through a friend and then he will get back to me.
That afternoon he emails again and says we must talk. I again ask what he wants. He responds with ” does anyone talk on the phone anymore?” I reply back again and ask what he needs. He says that he has yet to talk to a real human. His buddy sent him to someone at the company, and they said all negotiation was via the mail they sent. My attorney then stated that there was no negotiation happening because he had no contact with anyone. They stated again that any possible negotiation would take place via the email. My attorney suggested we call, and get a face to face appointment or walk away from the deal. He had never heard of such a thing and how in the hell did I find this building anyway. I mentioned it was seventy stories tall, so it was hard to miss. I also told him to copy me any changes he submits. He said that he wasn’t submitting anything. He was not even sure it as legal to do that. I asked it he was telling me he did not want to represent me in the deal? He said, “well no but I need to get back to you.” I mentioned that I wanted this done by close of business tomorrow. His response was silence and then “I will get back to you.”
The next morning another email and it’s the same attorney. A buddy of his knows the owners and he told him that they only do deals via the mail. My attorney asked how in the hell was that possible, and he said his buddy mentioned (AI) Artifical Intelligence. My attorney said that we should walk away because there is know way of knowing what the potential harm there could be to my company and not to mention the basic lease itself. I told him to send me any docs he had.
I called in my in-house legal council to look at the docs, and we went through the lease quickly. I email some basic changes. They responded right back. We email a couple more changes. They emailed right back again. The terms were agreed to by both parties and signatures were put on the final docs via electronic signature. They then sent complete timeline for the entire move with all details included. My legal council mentioned that it seemed simple once you get past the point of worrying about the numbers. I told him I thought the deal was fair and that the process was zero stress and refreshing. He said he would make sure everyone necessary was copied, and he looked forward to the new location and the opportunity to try some new restaurants.
An email popped up, and it was my attorney. He asked me what my thoughts were about the possibility of looking at some other spaces for rent. I emailed back that I already signed a deal for space today. He asked which one? I told him it was the one from yesterday. He responded that I was nuts, and he needed to see all the contracts, and I should get ready for a legal battle if I wanted to get out. I told him the deal was done, and we hoped to move in three months if things went well from our end. He suggested lunch as soon as possible. I said no. He asked why? I said I didn’t want to pay him to watch him eat. He laughed and said he would pick up the tab.
You could hear the L in the distance. The restaurant was small but elegant. ” My wife loves this pace.” He sat across from me, dark suit dark green tie and white shirt. ”
” I heard it’s supposed to be great,” I ordered the beef. Living on the edge.
” So, tell me what happened exactly.”
” Nothing happened. We need to move and this space fit us and the price and terms were right.”
” How do you know for sure?”
” Do you think we just went into this thing blind? We had done our research.”
” Who did you use?”
” Is that what you do? How do you know the market.”
” It’s not that hard. The data is all there. Besides, they knew who we were.”
” What do you mean? You negotiated with them ahead of time without representation?”
” No, They have us in a database and have been tracking us for years. They knew what our old deal was and knew what we were looking for.”
” How in the hell did they know that?”
” It’s called predictive analytics. They know their marketplace second by second. We were just a piece of that.”
” What about the numbers and the language of the contract?”
” Pretty generic stuff. By the way, did you see the flexibility we have in the lease?”
” Yes, I saw that. Seems a bit risky if you are the owner.”
” I thought it laid out good terms for us. Who’s side are you on again?”
” How did you get that put in there?”
” It was already in. It’s more common now than you think.”
” So it’s a done deal? You a generic contract and two days?”
” Yes, and we are moving forward. We need to focus on this quarter.”
” My buddy said that they are using some AI program to do part of their deals.”
” It seems that way. Not sure I could tell.”
” You’re not sure, but you signed the deal anyway? The computer put you at ease?”
” The terms and data are just that. Why complicate it beyond that?”
” I don’t get the AI thing.”
” It automates the process. Cleans it up and saves how much time and money for me?”
” I’m not so sure about that.”
” The process is in your mind new so that makes it wrong?”
” I’m not saying that. It’s the non-human element.”
” You mean the fact that you felt replaced in some way, so the transaction just wasn’t right.”
” I’m just not sure. There are so many elements and so many things that can and will go wrong.”
” What if there is enough data to make sure those so called things do not happen?”
” I don’t see how that’s possible in this marketplace.”
” Not only is it possible it’s what helped make my deal.’
” So you’re ok negotiating with a computer?”
” I wish it was doing it for me.”
” Again how do you know?”
” Know what?”
” That you and that computer did the right deal for you.”
” Hey, it’s just a business deal. Not really any emotion involved. Numbers data and location, that’s all it took. Oh, and flexibility.”
” I can see this kind of thing getting a lot of pushback, especially in commercial real estate. There are layers and layers of established protocol that make the present system work.”
” Maybe but that’s their problem. I could care a less about that system. I just wanted to move my company.”
” I see this a just a small piece of how deals will get done. (AI) Is Not The Commercial Real Estate Future.”
” When we move in a couple of months I will send you and invite to our open house.”
” Ok, sure thanks.” he picked up the check and as they walked towards the door he stopped and reached for the handle. ” Are you using any AI in your company?”
” We took two people off a different project and gave them a month to tell us where we need to go with it.”
” And have they came back yet?”
” Yes, and we are so far behind we are organizing a unit just to catch us up to the market. This stuff did not just show up yesterday.”
” Well, it seems like it did for me.”
” Did you not just say (AI) Artifical Intelligence Is Not The Future Of Commercial Real Estate?”
+1 Yes, this is a story to make a point but, I have seen this in real time.