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Happy March!
We are enjoying the spring blossoms with the cherry blossoms in full bloom.
Thank you for reading and if you have any questions or comments, reach out!
Mind the Gap: Has the AI Adoption Train Already Left the Station?
Artificial intelligence is reshaping industries and how people work at an unprecedented pace. But there is a striking gap between how individuals are adopting AI and how enterprises, particularly in real estate, are struggling to keep up (or in some cases, get started).
Today, we see individual professionals using AI daily for quick wins, like writing content, analyzing data, automating tasks, while companies are facing major roadblocks in deploying AI at scale.
The Divide: Personal AI vs. Enterprise AI
For individuals, AI adoption has a low barrier to entry. The cost is low, the learning curve is manageable, and the payoff is immediate. A well-crafted prompt can generate reports, summarize trends, or optimize workflows within seconds.
For enterprises, however, it is a different story. Implementing AI at scale requires structured, high-quality data, compliance frameworks, security measures, and significant financial investment.
According to recent research, as of late 2024 only 5-6% of enterprises have successfully deployed AI tools at scale, while 30.1% of individuals have used Generative AI (GenAI) tools at work since those tools have become available. This stark contrast underscores the challenge businesses face in catching up with individual adoption trends.
A major driver of this divide is the difference in the types of AI being adopted. Individuals are primarily leveraging GenAI (e.g., large language models that create new content like text, images, or code) through large language models (LLMs) like ChatGPT, Gemini, and Copilot, which are easy to access and require minimal setup.
In contrast, enterprises have traditionally focused their efforts on Predictive AI (e.g., models that analyze structured data to forecast outcomes or trends) for analytics, forecasting, and automation. These applications demand structured data, advanced integration, and governance frameworks.
This difference makes GenAI adoption much simpler at the personal level, while enterprises must navigate infrastructure and compliance challenges before deploying AI at scale.
Why Real Estate Firms Are Struggling
While real estate has always been data-rich, most firms have not treated data as a strategic asset. As a result, much of their data is unstructured and difficult to leverage for AI use. The structural challenges for real estate firms today include:
- Fragmented Data – Information is siloed across systems, functions, and ownership structures that makes it difficult to access and then feed into AI models.
- Legacy Infrastructure – Many firms operate on limited platforms that are not able to support AI-driven efficiencies.
- Security and Compliance Risks – Organizations have not yet developed strong governance for AI use to avoid exposure to cybersecurity threats and regulatory issues.
Despite these challenges, the drive to use AI within the real estate industry exists. From the research, we see that individuals working in the Real Estate, Rental, Leasing industry are using GenAI tools more than 40% of the time, signaling that the real estate industry has the talent base available and working to overcome the hurdles.
The Risk of Ignoring
The gap between individual and enterprise AI adoption is not just a technology issue, it is a strategic risk. Companies that continue to delay AI integration risk falling behind competitively, losing top talent, exposure to cybersecurity vulnerabilities, and missing innovation opportunities. Meanwhile, forward-thinking competitors who invest in AI are setting new standards for efficiency, decision-making, and innovation.
Recent research from MIT warns that AI adoption is outpacing risk awareness, with the detailed frameworks currently in place failing to account for 30% of potential AI-related risks. This highlights an urgent need for businesses to not only adopt AI but also to develop governance structures that protect data and ensure ethical use.
The Path Forward: Asking the Right Questions
Right now, the key to success with AI is not just getting the right answers, it is asking the right questions.
For individuals:
- Are you using AI responsibly?
- Is your data secure?
- Are AI-generated insights accurate?
- How can this tool be scalable across your team and organization?
For enterprises:
- How can you structure data for AI adoption?
- What security measures are in place?
- How can AI support and augment human expertise?
- Who do we need on our team to implement AI tools?
Real estate and tech leaders have the opportunity to move beyond passive observation. AI is no longer a wait and see technology, it is a learn and act opportunity. The firms that are navigating this shift thoughtfully are defining the future of the industry.
What questions does your firm need to ask to board the AI train?
Hartley, Jonathan and Jolevski, Filip and Melo, Vitor and Moore, Brendan, The Labor Market Effects of Generative Artificial Intelligence, 18 Dec 2024.
MIT CSAIL, Global AI adoption is outpacing risk understanding, warns MIT CSAIL, 14 Aug 2024
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What we are sharing
A huge thank you to everyone who joined Feroce Real Estate Advisors webinar: Turn Sustainability Plans Into Actionable Results. Your engagement, thoughtful questions, and real-world insights were valuable for all of us.
Key takeaways from the webinar:
⚖️ ESG+R is table stakes. No matter what we call it (Sustainability, ESG, Responsible Investing), global investors and occupiers have embedded the risk analysis framework into their financial decision-making processes.
⚖️ The cost of inaction is rising. The Risk of Ignoring (relevance ROI) can mean higher financing costs, reduced asset liquidity, increased vacancy, and declining valuations.
⚖️ Execution matters. The market has shifted from commitments to measurable outcomes because investors are demanding real results that mitigate risks and drive financial performance.
Greatly appreciated the insightful questions and discussion with attendees covering:
🐥 Rising insurance costs due to evaluation of a portfolio's risk factors and what that means for CRE going forward. Insurance is our Canary in the Coal Mine.
🐥 How investment firms are operationalizing sustainability tools during the acquisition due diligence process. Shout out to ULI for the sustainability pre-bid checklist.
🐥 The uneven awareness across our industry of building performance standards and risk analysis tools and how that is upending valuations and investment decisions. IYKYK
If you missed the session, feel free to access the key insights in our post-webinar guide and join us for our next webinar.
Last week was my first without spending Monday and Wednesday evenings diving into Artificial Intelligence in Real Estate with an impressive group of learners and leaders from around the world. A huge thank you to the Columbia University team, led by Josh Panknin for delivering a valuable learning experience. 🎓🏢
This course reinforced key fundamentals for deploying AI across real estate and provided critical insights into real-world applications. For CRE leaders looking to build internal capabilities within their organizations, I highly recommend exploring courses like this one.
My key takeaways to share with you:
🦉 Understand the technical side. While I do not need to be the coder, I do need to know enough about AI models (hello, regression analysis flashbacks!) to provide clear direction to technical teams. 🛎️ Sound familiar? This is also why I completed my MS in Real Estate Development.
🦉 Get your house in order. AI does not fix messy data, inefficient processes, or misaligned teams. Organize first, then innovate.
🦉 Define the need. Use AI to solve high-value problems—identify and address the most impactful use case. 💯 Spoiler alert: sometimes the solution to the problem is automation and not AI.
🦉 Resource the solution. Getting the right talent, technology, and data on board is essential to the success of any project, including AI tools.
There is so much more to come for AI in real estate. SO much more.
Enjoy the Ride 🌊
Less than 1/3 of Americans say that they trust AI.
According to Edelman’s 2025 Trust Barometer, AI faces a major trust gap in the U.S.
This is a significant barrier to adoption and a change of heart as historically, technological advancements have been reasons for optimism.
For CRE firms laying the groundwork to actually use AI tools (cough, quality data, cough), the forward thinking teams see this as a change management challenge, not just a tech rollout.
From my experience leading change, including tech deployments, success sticks when trust is built in the process, the people, and the technology.
You will find me firmly in the "trust, but verify" camp.
Where the teams that put in the work to earn trust, reap the rewards.
Consider how you can apply Edelman’s recommendations for building trust to ANY project:
⚡ Transparency First – Explain how AI works, what it does, and who benefits.
⚡ Proactive Governance – Getting ahead of regulation ensures AI is safe, fair, and accountable.
⚡ Demonstrated Impact – Real-world applications that improve lives will drive acceptance and trust.
⚡ Engaging the Public – Listening, responding, and including diverse voices in AI’s evolution will strengthen confidence.
Enjoy the Ride.
After reading MSCI's Sustainability and Climate Trends to Watch 2025 report during the very long month of January 2025, below are three impacts and opportunities in CRE to share with you.
1. Private Markets To Lead the Way Decarbonizing CRE.
With a 17% compound annual growth rate in investments focused on renewable energy, energy-efficient buildings, and sustainable infrastructure, private capital is accelerating the energy transition in CRE. As public markets face volatility, CRE investors look to leverage private funding channels to decarbonize assets in order to enhance long-term value while meeting regulatory expectations.
2. Climate Adaptation is No Longer Optional for CRE Portfolios.
With extreme weather events as regular occurrences, CRE investors are shifting focus from mitigation to adaptation. Investments in resilient infrastructure (think flood defenses, BESS, and climate-ready building materials) are critical to safeguarding asset value and ensuring business continuity. Future-proofing portfolios using adaptation finance is a competitive advantage.
3. Social Risks are Emerging as a Key Value Driver in CRE.
The CRE sector is increasingly being evaluated through the risk lens of social impact, with tenants, investors, and regulators demanding stronger commitments to workforce well-being, tenant engagement, and community relations. Properties integrating robust ESG+R strategies are achieving higher occupancy rates, rental premiums, and tenant retention. Firms addressing social risks are seeing that translate directly into improved financial performance.
I see this image every morning when I make my coffee.
Some mornings, I seek out this reminder.
Some mornings, it finds me.
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What Are We Reading
✨ Slow Boring, Cities aren’t back, Jed Kolko, 13 Mar 2025 – Digging into the details of population growth, immigration, and suburbanization.
✨ Preqin, White Paper: Pushing Forward Responsible Investing Practices of VC Limited Partners with a Deep Dive on Responsible AI and Data, Feb 2025 – Headlines aside, institutional investors are pressing forward with applying ESG to assess and mitigate risk.
✨ Vanity Fair, NYPD Confidential: Inside America’s Most Unconventional Counterterror Squad, Adam Ciralsky, 3 Feb 2025 – NYC exporting domestic counterterrorism expertise.
✨ JLL, DOGE Federal Lease Termination Tracker – Real-time data on how much the federally-leased footprint has contracted.
✨ * Brookings, The geography of generative AI’s workforce impacts will likely differ from those of previous technologies, 19 Feb 2025 – AI will have the biggest impact on the knowledge workers.
✨ McKinsey & Co, Unlocking value from technology and AI for institutional investors, 21 Jan 2025 - Strategy, tools, and talent are key considerations for institutional investors as they adopt and scale technology to generate alpha.
✨ SatPost by Trung Phan, Taylor Sheridan's Extreme Productivity, 6 Dec 2024 – A distracting rabbit hole.
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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 real estate investment, sustainability, and technology. We guide clients through complex challenges, positioning their real estate and teams for success in a 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 delivering investment performance measured by risk-adjusted returns and organizational priorities.
- Advisory board roles with proptech organizations focused on high ROI solutions in renewables, decarbonization, cleantech, and operational improvement.
Please reach out to connect:
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All the best,
Mandi
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