A.I. & Commercial Real Estate: an MBA NewsLink Q&A with Greystone’s Niraj Patel

(Thanks to Getty Images for making the cover photo available on Unsplash)

Niraj Patel is a business executive with Board of Director and C-level experience in global roles ranging from startups to Fortune 500 companies. He has both corporate and start-up experience in technology, operations, business ecosystems and internal/external innovations.

Patel is a pioneer in the design and management of digital enterprises powered by RPA, data, analytics and AI across the enterprise. His previous leadership roles include Chief Strategy Officer, CIO, Board Member, Adjunct Professor, co-founder, Diversity & Inclusion Champion and president. He also has experience with private equity and venture-backed companies.

MBA NewsLink: What challenges do companies face in adapting their organizations in ways that will help them to leverage artificial intelligence?

Niraj Patel: To effectively harness the power of AI, organizations must first focus on thoroughly understanding and rationalizing their existing workflows. This involves conducting a comprehensive analysis of current processes, identifying inefficiencies, and streamlining operations. Only when a company has a clear grasp of its workflow can it effectively identify specific use cases where AI can provide tangible benefits and drive meaningful improvements.

However, the reality is that most organizations are not investing the necessary time and resources into this crucial foundational work. Instead, they are often tempted to jump straight into implementing AI solutions without a solid understanding of how these tools fit into their overall business strategy. This lack of a systematic approach to workflow rationalization poses a significant challenge, as it hinders the ability to effectively integrate AI into the organization’s ecosystem.

MBA NewsLink: Describe a real estate example of leveraging artificial intelligence and the potential implications in terms of both time saved and quality of work product. 

Niraj Patel: I’m excited about the potential of AI in revolutionizing various aspects of the real estate industry. One compelling use case is the integration of AI with advanced hardware, such as Apple’s Vision Pro, to streamline the home inspection process. Imagine a home inspector wearing the Vision Pro headset, walking through a property, and verbally recording their observations. The AI system could then analyze the audio, extract relevant information, and automatically generate a comprehensive inspection report. This application of AI would significantly reduce the time and effort required for manual report writing, allowing inspectors to focus on their core expertise and increase their productivity.

Moreover, AI is already making significant strides in the realm of loan processing. By leveraging machine learning algorithms, AI systems can conduct preliminary assessments of loan applications before they even reach the underwriter’s desk. These intelligent systems can analyze vast amounts of data, including credit scores, employment history and financial records, to determine the viability of a loan application. This automation saves countless hours that loan officers typically spend chasing leads that may not materialize, enabling them to focus on high-quality deals and provide a more efficient service to their clients.

The implementation of AI in loan processing not only optimizes the workflow but also has the potential to improve the accuracy and consistency of loan decisions.

MBA NewsLink: Are companies more likely to purchase technology off the shelf, create their own proprietary tools or some combination?

Niraj Patel: The decision to purchase off-the-shelf technology or create proprietary tools depends on the specific needs and core competencies of the company. For horizontal solutions that address common business functions such as IT support and HR, it often makes sense to leverage readily available software or services.

These solutions have been developed and refined by specialized vendors who have a deep understanding of best practices in these domains. By opting for off-the-shelf solutions, companies can benefit from the expertise and economies of scale offered by these providers, allowing them to allocate their resources more effectively.

However, when it comes to the core aspects of a company’s business, I recommend that organizations consider building their own proprietary tools. These are the areas where a company’s unique value proposition and competitive advantage lie. By developing custom solutions tailored to their specific needs and workflows, companies can gain a significant edge in the market. Proprietary tools can be designed to seamlessly integrate with existing systems, optimize processes, and provide a level of customization that off-the-shelf solutions may not offer. While building in-house requires a greater investment of time and resources upfront, it can pay off in the long run by enabling companies to differentiate themselves and adapt quickly to changing market dynamics.

MBA NewsLink: What type of collaborations around technology development do you anticipate evolving within commercial/multifamily real estate and real estate finance ecosystem?

Niraj Patel: I anticipate a growing trend of collaborative technology development within the commercial and multifamily real estate ecosystem. One key area of collaboration will be between property owners, managers and technology providers to create integrated platforms that streamline operations and enhance tenant experiences. These collaborations will focus on developing solutions that leverage IoT sensors, AI-driven analytics and mobile apps to optimize building performance, energy efficiency, and occupant comfort. By working together, stakeholders can pool their expertise and resources to create innovative solutions that address the unique challenges of managing and operating commercial and multifamily properties.

In the realm of real estate finance, I foresee increased collaboration between lenders, investors, GESs and data providers to develop advanced risk assessment and underwriting tools. These collaborations will aim to harness the power of machine learning and big data analytics to improve the accuracy and efficiency of loan origination and portfolio management processes. By combining the domain knowledge of financial institutions with the technical capabilities of technology firms and the rich datasets of data providers, the industry can develop more sophisticated analysis and train models for predicting credit risk, identifying investment opportunities, and optimizing capital allocation. These collaborative efforts will ultimately lead to a more robust and resilient real estate finance ecosystem that can better adapt to market dynamics and support the growth of the industry.

MBA NewsLink: We see technological development moving ever quicker. What is your outlook for change at commercial real estate finance firms leveraging new technologies in an environment where people are accustomed to operations running a certain way?

Niraj Patel: I am optimistic about the future of AI in commercial real estate finance. While people may be accustomed to operations running a certain way, I believe that the key to successful AI adoption lies in raising the digital quotient of a company’s workforce and seamlessly integrating it into existing workflows. Rather than presenting AI as a disruptive force that requires significant changes to established processes, we should focus on leveraging AI in a manner that complements and enhances current practices.

By making AI feel like a natural extension of the team, such as implementing it as a bot within collaboration platforms like Microsoft Teams, we can encourage employees to interact with AI as they would with a helpful intern or assistant.

This approach allows organizations to reap the benefits of AI-driven efficiency gains without causing undue disruption to the way people are used to working. By presenting AI as a supportive tool that works alongside employees, rather than replacing them, we can foster a more positive attitude towards its adoption. At Greystone, for example, we have successfully integrated AI as a bot within our Teams environment, enabling our staff to leverage its capabilities without having to significantly alter their daily routines. This seamless integration has resulted in improved productivity and decision-making, while maintaining a sense of familiarity and comfort for our employees.

As we continue to explore and expand the applications of AI in commercial real estate finance, I believe that this people-centric approach will be crucial in driving widespread acceptance and realizing the full potential of these transformative technologies.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)