GlobeSt.com: Is the increase of AI-driven tech helping create new jobs in CRE?

Sherborne: It is clear that AI will replace, automate and transfer some jobs. However, AI will also create new jobs. According to a 2017 Forrester Report, AI will create 15 million new US jobs in the next 10 years.

In CRE, I see some big opportunities. First, AI generates an enormous amount of data. It's potentially quite valuable, but it takes smart people who know the industry to derive meaning from it. So data analytics will see huge growth. This is directly analogous to what happened in retail. The rise of online shopping led to a data explosion, which in turn led to much more sophisticated data analytics operations.

Second, AI will substantially raise the bar for customer service. Because AI can automate so much of the day-to-day mechanics of closing deals, companies will compete by better understanding their customers' business needs—as well as by helping them through parts of the process that may be unfamiliar or confusing.

Lastly, as the process becomes more efficient, leasing commercial space will become attractive to more businesses. When we lower transaction costs and transaction times, the industry grows overall. That's a good thing for everyone.

GlobeSt.com: How is AI improving the office search process?

Sherborne: An office search can be overwhelming. It's particularly difficult because our industry uses a lot of terms that are unfamiliar to a standard business audience. Sometimes it's even difficult for a tenant to understand how the listed rent relates to their total cost. Our industry spends so much time trying to educate tenants about CRE, and that's a huge missed opportunity to speak to tenants in their own language.

Second, AI personalizes the office search process to the unique needs and preferences of the tenant. Different companies make different tradeoffs between price, size, location, and amenities, ideally, a service tailors the search results to a specific business situation.

AI helps on the negotiation front too. By analyzing historical data, AI can help both parties narrow in on a fair deal and skip a few rounds of pointless back-and-forth. The faster the deal closes at a fair price, the better for everyone.

GlobeSt.com: How is AI improving the listing experience for landlords?

Sherborne: Landlords spend a ton of time 1) repeatedly answering the same questions about spaces and 2) pointlessly giving tours to tenants who are never going to sign a lease. The ideal use of AI provides the kind of information tenants find most relevant and asks landlords about those features up front. That information is shared openly across all prospective tenants looking for an office with that criteria. That's a big win for landlords because clients have fewer questions during the search process, with the key questions having been asked for them. In addition, AI-driven searches means that when tenants tour a space, it's much more likely to be a good fit for them.

GlobeSt.com: What can we expect from AI in CRE next year? In five years?

Sherborne: The next year will be filled with experimentation as companies begin to learn more about the underlying technology. AI thrives on data and smart companies will also be making big investments in data cleaning and acquisition.

Over the next five years, we'll see a steady migration to the more sophisticated analytics that machine learning can provide. If CRE follows the pattern from other industries, companies will abandon the simple rules of thumb they used to make decisions. In their place will be more nuanced models that provide better answers. With such large amounts of money at stake, even a slight advantage can translate into significant additional profits.

DALLAS—There has been much discussed about the impact of the increase of artificial intelligence on the commercial real estate industry. Jes Sherborne, chief technology officer of Truss, recently discussed the influence of artificial intelligence in an exclusive Q&A with GlobeSt.com.

GlobeSt.com: There is a general consensus that AI is taking jobs. Is this true, and what does this mean for CRE?

Jes Sherborne: On the contrary, I think AI is likely to increase the number of jobs in the CRE space. Just look what happened with banks. When ATMs became common, many people thought it would be the end for bank tellers. But that isn't what happened—ATMs are everywhere, and the US has more bank tellers than ever before.

I believe that AI technology will improve the CRE industry and solve pain points that have existed for decades, without taking away jobs. Specifically, AI technology will ease logistics and improve transparency. For example, it will be easier to share relevant information and set up tours so that brokers can focus on providing the expert perspective and counsel that clients value. While AI will improve several aspects of CRE, brokers will not be replaced. Human interaction and personal relationships will continue to be a critical component of commercial real estate.

GlobeSt.com: Is the increase of AI-driven tech helping create new jobs in CRE?

Sherborne: It is clear that AI will replace, automate and transfer some jobs. However, AI will also create new jobs. According to a 2017 Forrester Report, AI will create 15 million new US jobs in the next 10 years.

In CRE, I see some big opportunities. First, AI generates an enormous amount of data. It's potentially quite valuable, but it takes smart people who know the industry to derive meaning from it. So data analytics will see huge growth. This is directly analogous to what happened in retail. The rise of online shopping led to a data explosion, which in turn led to much more sophisticated data analytics operations.

Second, AI will substantially raise the bar for customer service. Because AI can automate so much of the day-to-day mechanics of closing deals, companies will compete by better understanding their customers' business needs—as well as by helping them through parts of the process that may be unfamiliar or confusing.

Lastly, as the process becomes more efficient, leasing commercial space will become attractive to more businesses. When we lower transaction costs and transaction times, the industry grows overall. That's a good thing for everyone.

GlobeSt.com: How is AI improving the office search process?

Sherborne: An office search can be overwhelming. It's particularly difficult because our industry uses a lot of terms that are unfamiliar to a standard business audience. Sometimes it's even difficult for a tenant to understand how the listed rent relates to their total cost. Our industry spends so much time trying to educate tenants about CRE, and that's a huge missed opportunity to speak to tenants in their own language.

Second, AI personalizes the office search process to the unique needs and preferences of the tenant. Different companies make different tradeoffs between price, size, location, and amenities, ideally, a service tailors the search results to a specific business situation.

AI helps on the negotiation front too. By analyzing historical data, AI can help both parties narrow in on a fair deal and skip a few rounds of pointless back-and-forth. The faster the deal closes at a fair price, the better for everyone.

GlobeSt.com: How is AI improving the listing experience for landlords?

Sherborne: Landlords spend a ton of time 1) repeatedly answering the same questions about spaces and 2) pointlessly giving tours to tenants who are never going to sign a lease. The ideal use of AI provides the kind of information tenants find most relevant and asks landlords about those features up front. That information is shared openly across all prospective tenants looking for an office with that criteria. That's a big win for landlords because clients have fewer questions during the search process, with the key questions having been asked for them. In addition, AI-driven searches means that when tenants tour a space, it's much more likely to be a good fit for them.

GlobeSt.com: What can we expect from AI in CRE next year? In five years?

Sherborne: The next year will be filled with experimentation as companies begin to learn more about the underlying technology. AI thrives on data and smart companies will also be making big investments in data cleaning and acquisition.

Over the next five years, we'll see a steady migration to the more sophisticated analytics that machine learning can provide. If CRE follows the pattern from other industries, companies will abandon the simple rules of thumb they used to make decisions. In their place will be more nuanced models that provide better answers. With such large amounts of money at stake, even a slight advantage can translate into significant additional profits.