Commercial Magazine

More Than a Passing Fad

What is the potential for artificial intelligence in commercial mortgage deals?

By Aaron Rafferty

Artificial intelligence is all the rage these days. From ChatGPT to task automation, AI innovations have been met with both excitement from those optimistic about their applications and hesitance from those worried it could replace many employees.

One thing is certain: AI is here to stay — and in a big way. Commercial mortgage originators wondering how they can implement artificial intelligence into their operations have numerous opportunities to embrace these powerful tools. The main reason why AI technology is becoming so prevalent across industries is its ability to process data while making connections more quickly and efficiently.

While the applications of such technology are obvious in more technical industries, some may not realize how this improved data processing could have tremendous impacts for commercial mortgage companies. From research and discovery to marketing and valuable lead generation, virtually every stage of the originator’s job (except for the deal itself) can be streamlined and improved using AI technology.

Efficiency tool

Experts in developing and using AI are commanding seven-figure salaries, with major companies such as Netflix offering salaries of up to $900,000 for an AI product manager. Even traditionally “human” jobs are being transformed by AI’s expanding capabilities in the use of natural language processing (NLP).

Still, it’s important to note that these efforts do not necessarily mean replacing people. In fact, AI itself is playing a role in providing personalized training in India. It also supports reskilling and upskilling of some workers who are learning how to incorporate AI into their workflows to increase output.

Those who embrace this new paradigm can remain ahead of the pack, while those who fail to recognize its potential could struggle to hold their own against competitors who do. This is particularly true in commercial real estate finance and other client-facing roles.

When it comes to the commercial mortgage sector, there’s one main way that artificial intelligence is being implemented — as a tool for employee productivity and efficiency. While these applications are occasionally client-facing, some of the most exciting AI-powered features are those used for administrative tasks.

One interesting use of AI is in the loan underwriting process. The technology can prefill and analyze application forms, saving the originator time and resources. AI can also look for anomalies and alert the originator to any problems.

Because of the improved data processing capabilities of AI compared to humans, such a program can help brokers close more quickly and successfully. Even more exciting is that these programs can reveal the lending opportunities that an originator may have otherwise overlooked or not had access to.

Industrywide impact

Predictive insights are another area in which artificial intelligence could prove particularly useful. Using AI technology, originators can accurately and efficiently comb through large datasets, allowing them to provide the most curated and customized opportunities for their clients. When purchasing commercial real estate, fit is paramount, and these in-depth analytics ensure that originators can provide the best service possible to their clients.

Like many other industries, AI is also being used by commercial mortgage professionals to automate some of the more monotonous tasks of their jobs, such as office work. Leveraging AI and NLP, loan originators can use this technology as knowledge agents or researchers to help them with the earlier stages of finding or marketing opportunities. They can also automate tasks such as customer service and lead generation. By using artificial intelligence in this way, originators can focus more of their time on what they do best: closing deals.

This technology is not just for filling out forms either. Many believe AI will revolutionize commercial real estate by integrating the technology into every facet of the industry, including interactions with customers, predictive analytics and automated property management systems.

The transaction experience could be improved significantly due to the proliferation of AI-powered tools, such as chatbots like ChatGPT. By setting up chatbots for prospective clients to interact with, mortgage brokers can create a 24/7 resource that offers clients the basic information and answers they may be looking for. These tools can also collect client information for the originator to use in the future.

Human element

As is the case in virtually every industry, the human element will have to remain involved. A big part of what makes for successful commercial real estate deals is an originator’s ability to form connections and relationships with their clients, and AI is unable to replicate this human factor. AI is also ineffective at accurately timing the life of a deal, which is where brokers bring their edge through intuition and experience.

Thus, it’s best for originators to look at AI as a supplemental tool they can use to make their jobs easier and more efficient, rather than as a replacement for their profession. By implementing these tools into their daily operations, commercial mortgage originators can waste less time on paperwork, empowering them to spend more time focusing on their strategies, negotiations and client relationships.

It will also be interesting to see how artificial intelligence can improve the experiences of people purchasing commercial real estate as the market heads into more uncertain economic times. With higher interest rates and lower demand in some real estate sectors, originators can use these powerful AI tools to ensure the best possible opportunities for their clients. In this way, originators can remain a few steps ahead of their competition and the market at large.

More commercial real estate transactions bring value not only to the broker and borrower but also to surrounding businesses. For example, if an office building is occupied, local restaurants will benefit through increased customer traffic from these workers. Beyond the commercial real estate industry itself, the use of AI could have profound implications for the broader economy. Enterprise AI systems could enhance employee efficiency and happiness, leading to better retention and overall output.

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Like other businesses, it’s critical for commercial mortgage companies to understand the edge that artificial intelligence will give them over their competition. They should begin investing time and energy to improve their current workflows. In doing so, loan originators will not only improve their own experiences but those of their clients too. This could benefit many others given the important role that commercial real estate plays in the broader economy. ●


  • Aaron Rafferty

    Aaron Rafferty is the CEO of StandardDAO and a co-founder of its subsidiary, CRE Hawk. He is a tech builder and behavioral scientist who previously pioneered research that merged behavioral science with advanced technologies. His companies leverage artificial intelligence and cloud technologies to create solutions that will advance humanity. Rafferty’s background in science and research, and his passion for solving tough problems, has led him to believe that tech, science and business can unite to bring about positive societal change.

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