NYU Schack Special Report: REITs Go Big on AI
As automation tools become table stakes, size and speed will continue to be an advantage.
Large public REITs—and most of them are—have better access to capital at lower prices, and they enjoy greater economies of scale. They also have something else that’s become increasingly valuable in today’s tech-based world. They have copious amounts of internal results-based data.
”Having models learn off of that key data is going to be the next evolution,” said Sumit Roy, CEO of Realty Income Corp. at the 30th Annual REIT Symposium hosted by the NYU SPS Schack Institute of Real Estate. “The company that figures that out best is going to continue to enhance the scale advantages.”
The focus of this year’s conference was “REITs in the Age of AI.” During the day-long event, REIT CEOs explained how they’re using AI to create efficiencies, improve customer experiences and, eventually, grow their incomes. Some called AI “just another tool,” comparing it to the personal computer and the Internet. Others described it as a transformational force, likening it to the industrial revolution and the introduction of the car. The challenges and opportunities that AI presents are not unique to REITS, but as new technologies are applied to large and geographically diverse portfolios, the results will be interesting to watch.
LIKE THIS CONTENT? Subscribe to the CPE Capital Markets Newsletter
Kimco Realty Corp. CEO Conor Flynn talked about the need for REITs to “upscale” existing teams and told the students in the room that their knowledge of and ease with AI will be “hugely advantageous” to them as they enter the workforce.
Invitation Homes CEO Dallas Tanner discussed how the lines between his company’s operations and technology teams are quickly blurring. “The way you traditionally talked about your tech stack was your tech stack and data living over here,” Tanner said. “Now maybe I don’t want it over there. It’s got to sort of be at the heartbeat of everything we are looking at and touching.”
While AI is transforming real estate functions and organizations, the REIT CEOs said the role of the human is still critically important for judgment and for key interpersonal skills like relationship building and being able to “read a room.” AI, they said, will be an “amplifier” of and a “catalyst” for humans and allow them to make faster and better decisions.
“We must have a human intervention,” said Debra Cafaro, chairman & CEO of Ventas. “and, in fact interestingly, when we sign letters to auditors, they make sure that, for example, our financial statements cannot be produced without human intervention.”
To build or to buy
There were some varying opinions about whether REITs should build or buy their own language models and agents. There is no shortage of off-the-shelf solutions today but in-house systems are gaining ground as a way to safeguard proprietary data and truly customize the AI tools.
“I expect that what we will end up doing is some combination of two, three or four service providers and customize a base product,” said Ralph Rosenberg, chairman of real assets for KKR, said the investment giant is using AI for acquisitions, asset management and property and portfolio management. “We don’t need to create the new Porsche 911, right? We just need to buy a Porsche 911 and then, like, tweak the color.”
But, according to Brendan Wallace, CEO & CIO of Fifth Wall, that’s the old proptech mindset where real estate companies took advantage of “free R&D” to solve their pain points.
During the past 12 months, Wallace said, there’s been a philosophical shift toward companies committing to building their own AI infrastructure and agentic agents that work closely with internal teams.
“DIY tech is back, and that is an entirely new problem set for real estate companies to face,” said Wallace in a chat with Marc Norman, associate dean at NYU SPS Schack.
Wallace recommended companies adopt “a culture of curiosity” and an openness to all AI solutions, “even the ones that scare you.” And he said companies will need exceptional talent. Wallace said there are an estimated 10,000 to 20,000 people who can build AI infrastructure, foundational models and agentic agents. Few of those work in industry and probably none work in real estate.
“The real estate industry needs to find a way to recruit that level of talent—and soon,” he said.
You must be logged in to post a comment.