Balancing Innovation and Insight: AI’s Role in CRE Due Diligence

Building Client Trust in AI

Inga Caldwell, partner at Cole Schotz P.C., noted that her firm has started addressing AI use directly in their client agreements. “In our retainer letter, we have language about the use at our firm of artificial intelligence,” she explained. This transparency often prompts clients to review terms more carefully than they typically would.

However, Caldwell observed that this initial concern typically fades over time. As clients become more familiar with how AI is being used and observe the efficiencies it provides, they become more comfortable.

Caldwell also noted that the term “artificial intelligence” was coined in the 1950s, and while we have come a long way from that decade, there is still much ahead. She compared this to the world wide web, as a “sort of a utopian notion of … freeing mankind to do bigger and better and more important things.” This perspective remains relevant today as AI continues to shape how we work and how it is used within the human experience.

Concern for the Next Generation of CRE Professionals

If you’ve participated in training on using AI in commercial real estate, you’ve likely heard the advice to prompt an AI tool as if it were a junior analyst. While this approach can be effective, panelists raised concerns about the potential long-term impact on talent development.

Millar discussed that this model may inadvertently be hurting the field by limiting the opportunities for early-career professionals to build critical skills and expertise. The “grunt work” that AI can now automate has traditionally served as training. Millar emphasized “without learning those skills, you can’t become a good senior project manager, let alone a reviewer of the work.”

Panelists emphasized that this shift presents a challenge for firms as they think about developing the next generation of CRE professionals.

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