In recent discussions with industry leaders and as outlined in our recent thought leadership piece “Evolution of Real Estate Network Planning in the Age of AI”, one of the most popular five values of leveraging AI technologies in their organizations focused on internal productivity and efficiency gains during the real estate analysis and approvals process. This process for some organizations can be months, even years, before breaking ground.
Our industry executives were very consistent. There is a lot of benefit to an organization in streamlining and automating as much of the standard Real Estate analysis and site approvals process as possible. Consider a large bank, retail or QSR organization that is looking at multiple site acquisitions, closures, relocations and consolidations simultaneously. The number of potential transactions is large and this risk of mistakes is real. The market opportunity analysis and business case development alone with multiple contingent real estate moves requires careful and thorough data analytics to drive the net new top line potential and bottom line net profitability.
The typical deal cycle requires the real estate team to go several steps which typically include:
- Site Selection and Evaluation;
- Due Diligence/Research;
- Site Investigation Reports/Feasibility Study;
- Municipality and Lender Required Reports;
- Preliminary Budgets Established (Proforma);
- Purchase Contract Signed.
There are lots of landmines within this process of which the most dangerous is the market data research and analysis that is the engine that will drive the final proforma business case to the executive committee. Historically, access to good data and the execution of solid and consistent analysis are the most popular areas to question on real estate approval discussions and can severely slow down approvals.
What if, you could use AI methodologies to develop “pre-approved” site-packages complete with forecasts and ROI analysis. This would speed up the internal real estate approval process and shorten the time to decision and market. There are two areas where AI can contribute to transforming the entire approval lifecycle through automation and standardization.
First, the new generation of AI and Machine Learning tools (Analytical Efficiency) available for building sales forecasting and cannibalization models are maturing in the market. AI High Performing organizations are building these capabilities in-house with their Geospatial and Data Science teams and leveraging cloud based technologies for data integration and model building that is unique to them. These modeling and data refresh capabilities are at the center of running real estate transaction simulations and building ROI predictions systematically and consistently. Other organizations achieve this through partnering with third party SaaS software providers, like PiinPoint.com and others. The ultimate goal of investing in more analytical AI capabilities is to automate the business case proforma and to run new scenarios as fast and possible with precision and consistency.
The second area where AI can contribute to shortening the “time to deal” is more administrative. Through Generative AI approaches, the organization can automate contract creation, due diligence reports, site approval plans, and business case document processing which will save time and reduce errors that can address the evolving needs of the Real Estate approvals process. In large organizations with massive brick-and-mortar networks, GIS and Real Estate Teams are managing multiple files at once - sometimes hundreds - and when something needs to be updated in a spreadsheet or a document - such as new data or assumptions - it has to be done hundreds of times. Historically, this is done manually and is a huge waste of professional time in light of new tools for automation. Furthermore, manual processes are prone to mistakes. By automating routine tasks, AI liberates professionals to focus on high-level strategy while reducing manual mistakes concurrently.
AI can be a catalyst in a journey from repetitive tasks to automated efficiency unlocking new levels of productivity and accelerating speed-to-market for Real Estate teams.
Check out PiinPoint and our Network Simulations capability. We exist to support our clients' need to increase their speed to market and close deals faster!
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