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rtificial Intelligence has revolutionized the real estate industry, transforming from a rudimentary tool to a sophisticated and trusted assistant. It now handles various tasks such as writing listing descriptions, handling inquiries, and underwriting deals. As AI advances, its applications in real estate are expanding rapidly, with some investment companies relying on it for deal research and analysis.

    While many believe that AI will always require human oversight, particularly for complex transactions like commercial property deals, this perspective may be shortsighted. AI has consistently demonstrated its ability to overcome limitations and challenge the notion that only humans can perform intricate jobs. It's conceivable that AI could eventually handle the full lifecycle of a commercial real estate transaction.

    Steven Song, founder of Diald, predicts that in 12 months or so, AI will be better at picking investments than an analyst. His company has developed an AI system to rank commercial real estate deals based on their likelihood of success by analyzing quantitative and qualitative data points. This process creates a holistic view of a property's potential performance, often leading to more balanced and unbiased comparisons.

    AI could also take over parts of the negotiation process, asking questions and adjusting terms based on seller responses. In a not-so-distant future, machine-to-machine negotiation might become the norm, with AI agents representing both buyers and sellers. Once widely adopted, all parties involved in transactions could leverage AI tools to underwrite and finalize deals.

    However, there are valid concerns about full AI integration, including potential errors and regulatory compliance issues. Early versions of generative AI models suffered from "hallucinations," while certain types of AI, like neural networks, can operate as "black boxes" with limited transparency. To address these concerns, companies like Cotality have taken a cautious approach to their AI deployment.

    Despite its current limitations, AI appears to be on a path that will eventually lead to the partial replacement of traditional real estate analysts. As AI systems become more transparent, explainable, and reliable, they will not only assist in research and underwriting but may also play a central role in negotiation and deal execution. The pace of progress is fast and accelerating, and it's possible that an entire commercial real estate transaction could soon be managed by AI agents on both sides.