The future of AI in CRE

• Corporate real estate (CRE) is already actively embracing artificial intelligence (AI), with 90% of companies planning to integrate AI to support human experts in CRE over the next five years.
• However, the peak of expectation in the AI hype cycle is approaching. Many companies have initiated AI pilots and training without a comprehensive strategy or roadmap for AI in CRE functions, risking disillusionment.
• CRE leaders must now move beyond the hype and adopt a systematic approach to realizing AI’s full potential. JLL suggests a four-stage approach that focuses on AI’s practical benefits, identifies meaningful uses, builds a business case for its application in CRE and secures strong C-suite support.

The “hype cycle” chart produced by consultancy Gartner shows how enthusiasm for, and adoption of, a technology develops over time. As the hype around a new technology accelerates, people come to believe in it as a “silver bullet” solution which will work seamlessly to solve any problem. CRE is approaching the peak of expectations with regard to AI: 89% of leaders believe AI can help them solve major CRE challenges.

There is more to this than just positive sentiment: nearly two-thirds of companies have started piloting use cases for AI in CRE and implemented training plans to boost staff skills. Furthermore, as a bottom-up action, 73% of CRE professionals are early adopters, using AI to augment their day-to-day work. At the same time, on the supply side, an ecosystem of more than 700 PropTech companies is working on AI solutions for real estate.

Taking a systematic approach to realize the promise of AI

A well-structured AI strategy for CRE is necessary to prevent companies from falling into the trough of disillusionment. CRE leaders must move beyond the hype and adopt a systematic approach that emphasizes usefulness in realizing AI’s full potential.

JLL suggests a four-stage approach which will allow CRE professionals to cut through the hype and focus on the tangible and practical benefits of AI, to identify meaningful uses of the technology, to build a business case for using AI in the CRE function and to secure strong support from business leaders.

In the hype phase, many companies mistake AI adoption as the goal, rather than a means to solve their challenges. This approach often leads to disillusionment.

An iterative process is a series of recurring cycles for analyzing internal and external factors, such as business pain points, organizational AI capacity, current IT systems and AI product availability in order to reset expectations, weed out impractical uses and refine the focus on sustainable and effective application.

In another JLL survey conducted last year—the JLL Global Real Estate Technology Survey—we demonstrated that making decisions about technology adoption by a company’s CRE function is a complex process involving a range of stakeholders. Nearly half of respondents report that IT and innovation decision-makers are involved; one-third also report the involvement of facilities management, 31% sustainability and 30% finance teams.

In this web of stakeholders, C-suite support is a key element to success. The technology survey found that companies are three times more likely to have a successful CRE tech program if business leaders were engaged with it and took part in tracking progress, rather than simply being presented with the results.

In the case of AI, C-suite support is particularly crucial. It helps balance competing budget demands, secure necessary resources and provide approval for the upfront investment required. Moreover, this support ensures organizational patience during the initial experimentation phase, which is essential before the return on investment becomes evident.