Using data science and AI to answer the need for speed in uncertain times

Exploring the intersection of AI, machine learning and commercial real estate

On April 9th, Altus Group expert Sally Johnstone will moderate the ‘Using Data Science and AI to Answer the Need for Speed in Uncertain Times’ session, with panelists Josh Panknin and Drew Conway, at the highly anticipated Urban Land Institute (ULI) Spring Meeting, in New York.

Sally Johnstone is a passionate industry thought leader positioned at the intersection of data science and strategy, whose work at Altus Group empowers clients across all sectors of commercial real estate to identify opportunities, mitigate risk, and maximize returns using machine learning and AI insights.

ULI’s Spring Session is the perfect ‘meeting of the minds’ environment for an engaged discussion surrounding the cutting-edge applications of data science and AI across the CRE industry, and in advance of this event, we asked Sally what she’s seeing in the industry and what we should expect from her session next week.

Recent large-scale “shocks to the system” have created a need for faster, more nimble decision-making across the CRE industry that can only be achieved with the help of data and new-age technology and practices. What are the biggest changes you are seeing in the market? What tools are being embraced?

It's funny, AI has become so popular and interesting to the world – seemingly overnight – with the release of Chat GPT, even though AI has been around for decades. Alan Turing first started talking about artificial intelligence back in the 1950s, and data science as a term was coined in 1956, so it’s not necessarily new, but it’s newly awakened in people’s consciences.

Across our industry today, there is an undeniable need for faster, more nimble decision-making, especially as it relates to machine learning capabilities and cutting-edge productivity tools. Data is integral to success in CRE, but data isn’t necessarily captured in a state that makes it easy to analyze, ingest, and bring together. The other challenge is that there aren't a lot of data scientists out there with deep CRE knowledge, and you need to understand both sides of the coin.

Fortunately, technology and intelligence providers like Altus Group are striving to create single sources of truth that allow industry players to get so much information out of the data that they couldn’t get before. With the right tools, you can evaluate and decide on a potential acquisition, for example, in a matter of hours rather than weeks or months. It’s incredible, and it seems like CRE companies are now truly willing to embrace these tools to unlock that competitive advantage.

You’ve mentioned an emerging trend coined “AI-washing” – can you tell us what that means?

Remember “green-washing”? Essentially, the same thing is happening in the technology realm. Right now, with AI being so topical and in demand, a lot of companies are making big claims regarding AI and machine learning capabilities, but when you peel back the curtain, they might be exaggerating the extent of those capabilities.

After all, the term ‘AI’ covers a very broad spectrum, so a company might be using AI, but in a very basic sense – and not in a way that advances decision-making or mitigates risk. So I think now, more than ever, it’s important to vet platforms and services under a critical lens – in fact, this is one of the things we are likely going to talk about at length in our panel next week.

Would you say the CRE industry is at a tipping point as it relates to tech adoption?

We are absolutely at a tipping point; there seems to be more of an appetite for this technology than ever before. But along with that curiosity comes confusion, and a lack of easily digestible knowledge.

With this in mind, it’s so important for technology vendors to provide education along with their solutions – break down the complexities of this technology so your clients can effectively leverage it and establish a criteria for success. Once they better understand what you can provide, it’s much easier for them to embrace it.

What role does data science play in helping industry players navigate an uncertain and at times volatile market?

The traditional ways of modeling rely on linear models built on historical data. But with machine learning and other data science tools, you can create predictive models that do a better job of knowing where you're going to be in 1-5 years in terms of returns, how risks might change, and how net operating income (NOI) and cash flows are likely to change based on what we know about how populations and economies will change.

Even if another pandemic occurs, we’ll be better prepared for it because we have data on what happened during the last one. Ultimately, what machine learning and data science tools enable you to do is make more informed decisions faster, because information is available – and aggregated – faster.

What are you most looking forward to at ULI Spring Meeting and what should we expect from your session?

Well, I don’t want to give too much away, but Josh Panknin and Drew Conway are absolutely brilliant. I can’t wait to talk to them, and I’m really looking forward to the questions attendees are going to ask, because I know they’ll come up with things I never would have thought of. Of course, as moderator, I’ll be running the panel and I have planned a structure for our discussion to ensure we get the most important information out there, but we are leaving a significant amount of time for Q&A, which I think will be incredibly valuable for everyone.

The ’Using Data Science and AI to Answer the Need for Speed in Uncertain Times’ session is taking place at the ULI Spring Meeting on Tuesday, April 9th at 2:30 PM (GMT -05:00). For more information, click here.