Anyone who has their finger on the pulse of new tech developments will have heard of ChatGPT by now. Released in November 2022 by artificial intelligence research lab OpenAI, its initial success has already piqued the interest of tech giant Microsoft, reported to be in talks around a $10 billion investment in the firm.
What is ChatGPT?
ChatGPT is an innovative artificial intelligence (AI) technology designed to process and generate human-like language in a conversational manner. Some of its competencies right now include;
Providing answers to questions;
Writing, debugging and fixing code;
Teaching and explaining;
Creating and editing content.
Impressive list and no wonder then that the chatbot’s advanced capabilities have garnered worldwide attention in the last few months; it’s almost like having your own virtual assistant on hand 24/7 to assist with whatever you need them to. Whether it’s writing a blog for your small business or giving you ideas for bathroom renovations, ask and you shall receive content.
Here’s a simple visual from OpenAI themselves on how this early model works…
What’s the Potential of ChatGPT in Commercial Real Estate (CRE)?
The CRE industry has many facets and ChatGPT will enable most areas to realize some significant efficiencies. Some of the tasks it might help with are;
Generating market analysis - the model may be trained on CRE data so that it generates market analysis, property comparisons and predictions which support agents and investors in making informed decisions;
Scheduling property viewings - it can be used to coordinate appointments between agents, buyers and sellers;
Providing virtual tours - combined with virtual reality technology, ChatGPT might be utilized in creating remote tours of properties, something that has become commonplace and a vital tool for international transactions;
Customer service inquiries - the system can be used to create a virtual assistant to respond to customer questions around a property’s availability, features and surrounding developments;
Generating automated property listings - detailed and compelling listings can be generated along with other marketing collateral which will save both time and effort for realtors and their offices;
Producing sales and leasing proposals - ChatGPT can be used to generate professional proposals for the sale and lease of commercial properties;
Property management - ChatGPT can support property managers by generating reports, responding to tenant inquiries and organizing and liaising with contractors.
Are there Limitations to what ChatGPT can do?
No doubt, this technology is the best AI powered chatbot in existence so far, but it doesn’t mean that it’s without its limitations.
Unlike search engines which index web pages on the internet and display them for the user to locate the information they asked for, ChatGPT is not connected to and cannot search the internet for information. In essence then, it’s only as good as information that it learned from and the answers it shares may not be completely accurate. Their disclaimer itself points to this shortcoming…
Furthermore, the training data that it learned from goes as far as 2021, so the data can also be outdated. It’s highly likely therefore that the information you get will still need to be fact and sense checked by an actual human, although we are still in the test and research version.
The bot provides very plausible sounding responses (if not a little stiff), but they can’t yet be taken at face value and unless you know the answer already to know it’s wrong, it’s kind of defeating the object.
It’s important to note also that as there’s no connection to the internet, it relies on a very big server, and whilst we’re still in the test version which is free to use currently, the number of users is capped. Once the program reaches capacity, it requires you to check back at a less busy time. In this sense it can’t be relied upon for time sensitive projects, not right now anyway. The number of users wanting to access the bot far outweighed expectations, crossing the 1 million mark within a week of launch and Sam Altman, CEO of OpenAI has already indicated that it will need to move towards a paid subscription model in the near future to cover its costs; what that will look like no one knows.
Given how many CPUs it takes to run the model, the energy requirements are counter-intuitive to climate change action and sustainability will be front of mind when thinking about future developments in AI.
Sustainability aside, the developers also have an ethical problem to solve - the bot is by its very nature, well biased. The outputs reflect the inputs of both the people who created it and those that are using it, these users being inherently biased themselves. Apart from blocking outputs from spouting derogatory remarks, there’s work to be done on achieving the goal of a system that works for everyone, everywhere without disadvantage.
Is there a Future for ChatGPT in CRE?
Despite the initial limitations of ChatGPT, it’s an exciting time for tech in CRE and brokers are already using the technology to enhance their services and close gaps in their industry-specific knowledge. We are most definitely on the precipice of a seismic shift in the CRE industry. ChatGPT and indeed many other technologies will transform the way brokers work and streamline processes at every stage of the property buying and selling process.
Will it result in the mass loss of jobs or decreased importance of the role of the broker? No, not in our opinion, it will simply put more emphasis on the relational nature of commercial property transactions and the broker’s ability to add value through local knowledge and sound judgment; things that can only be learned through human experience.
Family offices will not be able to go it alone, not even with every wealth tech in hand because they’ll likely miss out on the financial and competitive advantages that come through a trusting relationship with experienced advisors. Absolutely, the best CRE advisors will be using ChatGPT and the like to up their game but as its usage becomes widespread, it will no longer be a differentiator. Information is becoming more and more commoditized, that’s no secret and has been gradually altering the role of the broker for years. The best of the best understand that AI tech for now at least, can only work for them if they have a detailed insight into the goals, concerns, hopes and dreams of their family office clients. We are emotional beings after all and the broker’s skill is still invaluable in knowing what to do when. As good as ChatGPT is, in its own words…
“As a language model, I am able to understand and respond to text input that expresses emotions, but I do not have the ability to experience emotions myself. I am a machine and do not have the capacity for consciousness or emotions.”
Consciousness and emotions are those elements of CRE investment that are very hard to replace with a computer.
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