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Hi Reader,
This month, we are focusing on risk.
Not about avoiding it, but understanding it, and identifying where it is being mispriced.
In today’s market, it is easy to get pulled into short-term signals while missing the longer-term risks that are already visible. Energy accessibility, affordability, and reliability; regional building performance standard regulations; technology-driven operations; and workforce dynamics are not future concerns. They are here, now, and increasingly being priced by others.
In this month’s newsletter, I share a perspective on how to reframe these risks, treat them as “known unknowns,” and do the work to convert them into “known knowns” so that, as asset managers, we can do what we do best: evaluate risk and create value.
As always, thank you for reading and thank you for sharing your feedback and comments. Keep them coming!
Dear Future CRE Asset Manager -
Welcome to the future. Looking back over the last few years, we have both seen asset managers being asked to make decisions and price risk in a market that is misreading the risks. Managing, pricing, and capitalizing on risk are not new to you. You know this work. You have been trained to assess uncertainty, weigh tradeoffs, and allocate capital to deliver strong risk-adjusted returns. The job has never been to avoid risk. The job is to understand it and today that means recognizing where risk is being mispriced.
Much of the market continues to react to short-term signals while underweighting longer-term factors that are already visible. There is still work to be done addressing current and looming foreclosures, but that cannot be the only lens. The next step is to broaden your view of risk as you shape the go-forward plan.
In today’s market, energy access and reliability, regional building performance standards, operational demands driven by technology, and shifts in workforce capability are not surprises. These risks are no longer hypothetical or niche, they are present, measurable, and increasingly priced by external stakeholders. Our work is to treat them as “known unknowns.” We know they exist, even if we do not yet fully understand how to address them. Then we apply our expertise to convert them into “known knowns.”
We can take energy resilience in an office building as a pressing example. Rising demand for energy is colliding with constrained grid capacity. In 2025, wholesale power costs in the PJM Interconnection region (13 states that include much of the Mid-Atlantic) increased 54% from 2024, resulting in higher utility bills for customers, with significant increases for commercial users (like office buildings). At the same time, we are also seeing on-premises technology, including AI-enabled tools increasing building loads while the utility companies are struggling to expand supply. This imbalance is already showing up in pricing volatility, capacity constraints, and a higher risk of service disruption. This is not a future scenario. It is the current operating reality.
We have seen this pattern before. The property insurance market was the canary in the coal mine five years ago pricing climate and extreme weather risks. Insurance companies identified the exposures, crunched the numbers, and priced accordingly. Owners saw premiums spike while coverage shrank. The negative impacts to property returns were material and enduring.
Energy is moving along a similar curve. Tenants are making decisions based on their ability to operate. Access to affordable and reliable power along with a building’s operational resilience under stress are becoming baseline expectations. Properties that meet those expectations will compete differently than those that do not. Hum along with me: “One of These Things (Is Not Like The Others).”
There is a simple truth here. We both know that choosing not to act is still a decision. When there are known risks on the table that are not addressed, that is a choice that carries exposure. The question is not whether risk is being taken. It is whether it is being understood, priced, and managed with intention.
The broader market context continues to evolve. Real estate cycles persist, with additional forces impacting supply and demand. Capital flows, regulation, technology, and demographics are influencing the risk-reward calculus. These signals are visible when we widen our field of view: insurers pricing exposure, regulators defining performance thresholds, tenants prioritizing operational reliability, technology reshaping demand and operations, and workforce dynamics influencing how buildings are run. Evaluate these as core inputs into asset performance.
The path forward is clear.
Within the next 90 days, broaden your lens on risks to map the known unknowns across your portfolio. Consider evaluating energy access and reliability, regulatory exposure from building performance standards, building level technology infrastructure, and your workforce AI readiness.
With that foundation, you can convert the known unknowns into known knowns by engaging with experts across disciplines. Understand how they are assessing risk, where they see gaps, and how they would approach mitigation and opportunity.
Then build a plan that translates insight into specific actions. Prioritize investments, adjust operational strategies, and position assets to meet evolving expectations.
This is where asset managers shine. We do the work to understand risks and that creates value. The advantage sits with those who take the time to understand these inputs in a complete way and translate that understanding into action. Complexity does not eliminate opportunity. It redistributes it.
Sincerely,
Mandi
Striving Future CRE Asset Manager
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As technology continues to dominate the conversation in CRE, I shared a series exploring the Last Mile Problem for AI in CRE through the lens of People, Process, and Pride.
AI in CRE's Last Mile Problem
Everyone in CRE is talking about AI.
Most firms are still kicking the tires.
In telecom infrastructure, the “last mile” is the hardest part, the final connection from the network to the end user.
You can build the entire system, but if you do not complete that last mile, it does not work.
AI is facing the same challenge.
A recent Harvard Business Review article, ‘The “Last Mile” Problem Slowing AI Transformation’ laid it out:
🔸 The challenge is no longer building the AI tools.
🔸 The challenge is getting them into the hands of people to use in daily operations.
Commercial real estate is a clear example of this challenge. Because we know this pattern, just in a different form.
🔸 We are good at organizing our teams for specific tasks within the CRE value chain, think acquisitions separate from capital markets separate from asset management teams.
🔸 We are good at finding efficiencies through outsourcing, such as third-party property management.
🔸 In doing so, we create large gaps to bridge when we want to make better-informed decisions with integrated data across multiple silos.
AI is just the latest place where this shows up for our industry.
So, what can we do about it? We can look at it through the lens of three things:
PEOPLE. Do teams know how to use these tools in their day-to-day work?
PROCESS. Are AI tools embedded into workflows and decisions, or sitting in pilot purgatory?
PRIDE. Are we willing to evolve how we work, or are we holding onto “the way we have always done it”?
Look at it from this perspective and the issue becomes clear:
Operational excellence is the name of the game.
This is not a technology problem.
This is an execution problem.
Move from AI hype to habit by evaluating your people, process, and pride factors.
🎤 Start by asking your team members: Where are you actually using AI today in daily workflows?
Yes, look at the pilots.
And then dig deeper to find where people are already using AI tools to solve real pain points.
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PEOPLE: The Adoption Gap
Overcoming the last mile challenge of moving from AI hype to habit in CRE requires looking at the three-legged stool of People, Process, and Pride.
Last week, we underlined the core issue: AI adoption is not a technology problem. It is an execution problem.
Today, we focus on People.
AI tools are everywhere.
Usage is not.
We are handing teams powerful tools and expecting behavior change.
That is not how change works.
We see this play out regularly in CRE.
A new tool gets rolled out.
An email goes out with a link.
Maybe a quick note: “This will help streamline your workflow.”
And then … crickets.
Nothing happens.
Because there was no training.
No context.
No explanation of why this makes someone’s job easier.
So there is no reason for anyone to change how they work.
This is the last mile problem showing up in real time.
AI is not only about access.
It is about adoption.
And adoption happens when people understand:
⚡how the tool fits into their role,
⚡how it helps them solve a real problem, and
⚡how to use it consistently.
Layer on top of that what we already know about our industry.
We have a workforce that needs reskilling.
We are working with fragmented, inconsistent data.
And our teams are already stretched.
Dropping AI tools into that environment without support is not a strategy.
It is wishful thinking.
If you want AI to take hold and move from hype to habit, start here:
🔰Train on how the tool fits into the workflow, not just what the tool does.
🔰Show how it saves time or improves a decision.
🔰Stay engaged beyond the initial rollout. Focus on the humans.
Because if your teams are not using AI in their weekly work, you are still at mile zero.
One next step to take:
🎤 Pick one AI tool you have introduced and ask your team, “How are you actually using this today?”
Then listen closely.
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PROCESS: From Pilot to Operations
Overcoming the last mile challenge of moving from AI hype to habit in CRE requires looking at the three-legged stool of People, Process, and Pride.
Last week, we focused on People.
Today, we focus on PROCESS.
Most CRE firms think they have an AI problem.
Instead, they have a process problem.
AI shows up today across organizations as:
🔸 pilot programs
🔸 vendor demos
🔸 side-of-desk experiments
And then… it stops there.
Sound familiar?
We treat AI like a project.
Something to test.
Something for someone else to handle.
But value in CRE is not created by pilots.
It is created in execution.
The "process as a project" pattern is one we know well in CRE.
We underwrite with rigor.
We launch with energy.
And then the transition from acquisitions to asset management is bumpy.
AI is following the same path.
The gap is not capability.
The gap is integration.
Where we see it break down:
🍳 There is no clear workflow.
🍳 No defined ownership.
🍳 No connection to actual decisions.
So the tool exists, but the business does not change.
This is the last mile problem at the process level.
The shift we need to make?
AI tools need to be embedded into the process so that teams can make better-informed decisions.
Not adjacent to them.
Not an afterthought.
Embedded.
Think about your core decisions:
🍎 Leasing.
🍎 Investments.
🍎 Capex planning.
🍎 Energy and operations.
Then think about where could AI improve outcomes for these core items based on:
⚡ speed
⚡ quality
⚡ time
(Another tried and true three-legged stool!)
Now you can identify the processes to address.
Remember:
Operational excellence is the name of the game.
When AI is improving decision-making, it is creating value.
Get started today:
🪜 Identify three recurring decisions in your business.
🪜 Pick one.
🪜 Map how that decision is made today.
🪜 Ask your team members: where could AI improve this process?
Then listen intently to move hype to habit.
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PRIDE: The Hidden Blocker
Overcoming the last mile challenge of moving from AI hype to habit in CRE requires looking at the three-legged stool of People, Process, and Pride.
We have already covered People and Process.
Today, we focus on the elephant 🐘 in the room: PRIDE.
This is the part we do not yet talk about enough.
Commercial real estate is a relationship-driven, experience-driven, information-hoarding industry.
We take pride in:
🔸 knowing our markets
🔸 trusting our instincts
🔸 trading in information
That has created a lot of success.
And it can also slow us down.
Because AI does not just introduce new tools.
It introduces a new way of working.
More data.
More visibility.
More transparency into how decisions are made.
And that can feel uncomfortable.
Pride shows up in subtle ways:
🎤 “I already know how to do this.”
🎤 “I trust my gut.”
🎤 “We have always done it this way.”
Not always said out loud.
But present in how decisions get made.
This is the last mile problem at a cultural level.
Because even with the right people and the right process, if the culture does not support change, adoption stalls.
So what is the mindset shift? What do you communicate to your teams?
AI does not replace expertise.
It augments it.
Or more directly:
You may not be replaced by AI.
You will be replaced by someone who uses it better.
That is not a threat.
It is an opportunity.
You have the opportunity to leverage this change to build value.
The path forward:
🪜 Reward learning, not just being right.
🪜 Create space to test and iterate.
🪜 Normalize using new tools to improve decisions.
🪜 Focus on building teams that are both experienced and adaptable.
Because the goal is not to replace how we work.
It is to evolve it.
One step to take next:
In your next team meeting, ask: “Where could AI help us make a better decision?”
Then listen like a hostage negotiator.
That is how you move from hype to habit.
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AI in CRE: From Hype 🚀 to Habit 🪢
For those of you following along, we have spent time digging into how to overcome CRE’s last mile challenge of moving from AI hype to habit through the lens of People, Process, and Pride.
PEOPLE → Adoption
Are your teams actually using AI in their day-to-day work?
PROCESS → Integration
Is AI embedded into how decisions are made?
PRIDE → Culture
Are you willing to evolve how you work?
BLUF:
AI will not automatically transform your business.
Your ability to operationalize AI will transform your business.
We have seen this before in CRE.
Sustainability moved from reporting to action.
Data moved from liability to asset.
Now AI is moving from hype to habit.
Or not.
Most firms are still kicking the tires.
The opportunity is still wide open to leverage change and build value.
The path forward is not easy, but it is clear:
🔸Talk to your team, ask them to identify one recurring decision.
🔸Work with them to redesign it with AI.
🔸Train them.
🔸Track the adoption.
🔸Plan to and then iterate.
🔸Rinse and repeat with the next recurring decision.
Operational excellence is the name of the game.
Get started today.
Move from hype to habit.
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What We Are Reading
✨ Hyperdimensional, "New Sages Unrivalled" On Mythos, Dean Ball, 8 Apr 2026 – Anthropic’s Mythos model signals the end of AI adolescence and we are still missing the equivalent of a prefrontal cortex to manage the risk.
✨ Epistemic Humility, Epistemic Humility by Design: Why enterprise AI needs a new architectural doctrine, Tama Huang, 2 Apr 2026 – Tama dropping some wisdom.
✨ The New Yorker, Jessie Diggins’s Last Run, Bill McKibben, 24 March 2026 – moment for inspiration and admiration.
✨ The Atlantic, Washington’s Sewage Apocalypse, Henry Grabar, 18 Mar 2026 – the headline is not hyperbole.
✨ Vertical, The Perfect PropTech Cap Table, Matt Knight, 13 Mar 2026 – taking this to heart for REAiL.
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Where We Can Catch Up
- JHU Real Estate Alum Network, 30 Apr
- CCC: Licensed to Build, 7 May
- Girl Scouts Nation’s Capital Women’s Advisory Board, 13 May
- CREBA Board, 14 May
- PTAG Spotlight Call, 14 May
- ULI Washington Management Committee, 15 May
- ULI Washington Local Product Council Summit, 3 June
- Girl Scout National Convention, DC, 20-25 Jul
- Blueprint, 22-25 Sep
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About Feroce Real Estate Advisors
Feroce Real Estate Advisors works with forward-thinking real estate companies to leverage change and build value at the intersection of commercial real estate investment, sustainability, and technology. We guide clients through complex challenges, positioning their real estate and teams for success in our rapidly changing world.
Our work usually falls into one of these categories:
- Fractional executive roles serving as head of asset management or portfolio management for growing real estate investment management companies.
- Provide high value strategic advisory services with a focus on investment performance, organizational priorities, and technology deployments.
- Advisory board roles with proptech organizations focused on high ROI solutions in operational improvement, decarbonization, and cleantech and renewables.
Our clients hire us when they are at an inflection point, faced with scaling up, repositioning portfolios, or maneuvering through complex decisions. We deliver clarity, structure, and momentum to take teams from reacting to proactively executing a plan that delivers measurable results. We bring the combination of institutional investment experience, real-world operating execution, and a future-oriented lens on technology and resilience.
Please reach out to connect:
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All the best,
Mandi
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