Commercial real estate just delivered a sobering reality check on AI implementation. While 88% of investors and landlords are piloting artificial intelligence according to a new JLL survey of 1,500+ industry decision-makers, only 5% have actually achieved their program goals. The disconnect reveals an industry racing to adopt AI but struggling to deliver meaningful results, even as companies pour resources into what they hope will be their competitive advantage.
The numbers tell a story of ambition meeting reality in commercial real estate's AI transformation. JLL's comprehensive survey of over 1,500 senior CRE decision-makers reveals an industry that's moved from AI skeptic to aggressive adopter in just two years - but success remains elusive.
The adoption surge is remarkable for a sector historically resistant to change. Compare today's 88% pilot rate among investors, owners and landlords with the mere 5% who were testing AI just two years ago. Corporate real estate occupiers show even higher adoption at 90%+, with most companies running an average of five simultaneous use cases.
"If you think about commercial real estate, traditionally, it is not a quick technology adopter, and it's usually skeptical," Yao Morin, JLL's chief technology officer, told CNBC. "So the high number of adoptions is actually quite surprising to me."
But the enthusiasm hasn't translated to results. While nearly half of respondents achieved two to three program goals, the 95% who haven't reached all their objectives point to a fundamental shift in how companies view AI's role. The goal posts have moved from operational efficiency to revenue generation - a much harder target to hit.
Companies are now using AI to reshape investment risk models and make portfolio decisions based on algorithmic output. This represents a quantum leap from simple task automation to core business transformation. "When you really start moving towards the revenue side, the margin expansion side, then it's going to require a lot more than just using a technology," Morin explained to CNBC.
The financial commitment reflects this elevated ambition. More than half of surveyed investors secured significant AI budget increases over the past two years, despite broader economic headwinds hitting the commercial real estate sector hard. Their top spending priority goes to strategic advisory services for technology and AI implementation, followed by cybersecurity upgrades and infrastructure development.
What's particularly striking is how companies are approaching AI deployment. Rather than starting with low-risk, simple applications - the conventional wisdom for new technology adoption - CRE firms are diving straight into sophisticated, high-stakes use cases. "Our survey showed the opposite," Morin noted. "We are getting to a point of sophistication, beyond this initial skeptical phase, where companies are really focusing on the competitive advantage to pressing business problems."
