Leading the AI Transformation in Real Estate
There is only one Blockbuster store left, in Bend, Oregon. It stands as a lonely relic of a company that waited for the future to slow down.
Real estate cannot afford that posture. We are at the inflection point where people-heavy processes become AI-enhanced operating models. The gap between early movers and laggards will open quickly; going slow is no longer a strategy.
Why Real Estate is Primed for AI Transformation?
Real estate is one of the largest asset classes in the world—and one of the most inefficient. The industry traditionally relies on manual workflows, fragmented data across geographies, and massive volumes of unstructured information.
AI thrives in this environment. It turns inefficiencies into competitive advantages by:
- Automating the mundane to free up human capital.
- Extracting insights from complex data sets.
- Enhancing decision-making with real-time context and speed.
According to Morgan Stanley, real estate generates more data per dollar of revenue than almost any other sector, yet utilizes very little of it operationally. AI flips this equation. By integrating AI-driven labor automation, U.S. REITs and CRE services could see a multi-tens-of-billions opportunity, potentially boosting operating cash flow by mid-teens percentages.
The Three Waves of AI Transformation
- Near Term (0-12 months): AI Assistance Put AI in the work, not on the slide. Focus on repetitive tasks like drafts, lookups, and triage. This is the "copilot" era, where humans approve and ship work faster than ever before.
- Medium Term (12-36 months): AI Orchestration Tools evolve into interconnected agents. One agent watches service levels while another tunes pricing or reconciles data. Humans shift into roles focused on review, exceptions, and high-level relationships.
- Longer Term (~5 years): AI-Native Operating Models Work is reassigned rather than deleted. We will see fewer coordinators and more "system operators." Micro-agents handle the routine, while people focus exclusively on judgment-based work.
Where AI Will Transform Real Estate Operations?
Investments: The Starting Point
Buying and selling the right assets at the right time drives returns. AI will revolutionize due diligence, underwriting, and market analysis by processing vast data sets to identify risks and opportunities faster than any human analyst.
The "Big 3" Cost Centers: The Real Opportunity
The greatest operational impact lies in asset management, property management, and leasing. These high-volume areas are the perfect fit for commercial real estate lease management software enhanced by AI.
- Asset Management: AI will automate budget and business plan tasks, continuously monitoring portfolio performance to optimize capital allocation.
- Property Management: PMs will shift from administrative tasks to tenant satisfaction. AI handles work order routing and compliance, allowing managers to solve complex tenant needs.
- Leasing: AI eliminates manual data entry and improves lead routing. By using advanced commercial real estate lease management software, brokers can access high-quality market data instantly, allowing them to focus on negotiations rather than paperwork.
The VTS Advantage: Built for the AI Era
This transformation requires more than generic tools; it demands platforms built for CRE’s unique challenges. VTS has spent a decade organizing and standardizing data across millions of square feet to create this foundation.
While a general AI might catch a red flag in a single document, VTS AI spots patterns across entire portfolios. It understands how specific tenant types respond to lease structures and how submarket conditions predict future demand—a "knowledge compounding effect" that creates value over time.
The best AI is embedded invisibly into your workflow. VTS AI enhances your existing processes by:
- Flagging unusual terms during lease proposal reviews.
- Suggesting optimal timing for capital improvements based on lease schedules.
- Providing market-informed recommendations for rental rates based on real-time demand signals.
Our AI strategy isn't a "bolt-on" feature; it is the core of our mission to be the default operating system for the built world.
The Choice Ahead
Firms that treat AI as a core operating capability will pull away on cost, speed, and tenant experience. The rest will find themselves with great locations, but business models the world has moved past.
The question isn't whether AI will transform commercial real estate—it’s whether you will lead that transformation or play catch-up. The future won’t slow down. For those ready to move, the AI revolution is the opportunity of a generation.
Unless otherwise noted, statistics are from Morgan Stanley Research - How GenAI May Reshape the Real Estate Industry (July 1, 2025) and its companion podcast note.
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