**The Promise and Challenge of Artificial Intelligence in Retail Real Estate**
Artificial intelligence (AI) has quickly moved from a futuristic concept to a practical tool in commercial real estate, especially within the retail sector. As VTS’ Ryan Masiello pointed out in a recent Forbes article, the rise of AI as a game-changer in real estate technology comes as no surprise.
Industry experts agree. “AI has come a long way in retail leasing over the past five years,” said Brent Loomer, Lead Managing Consultant at RealFoundations. “What used to feel like a future-facing concept is showing up in practical, everyday ways across the leasing process.”
Despite its utility, experts caution that AI is a complement to—not a replacement for—human expertise. Loomer and others told Connect CRE that while AI enhances efficiency, it will not replace jobs. “It makes agents more efficient, but it’s certainly not taking off the workload some people might expect,” said Tanner Olson, Managing Partner at Legend Partners, who estimated that AI has helped cut his workload by 1% to 10% depending on the transaction.
### Upsides and Downsides
AI today does far more than crunch numbers—it can predict market trends, compare lease terms, deliver lease abstracts, and match tenants. Jon Brecher, Vice President at JLL, highlighted its growing capabilities in streamlining real estate transactions.
#### Documentation
AI is particularly useful for handling mountains of leasing paperwork. “You can take a 50-page lease and ask AI to do an abstract,” Olson said. While the output still requires fact-checking, it helps expedite the process.
Mark Sigal, CEO of Datex Property Solutions, noted that tools like MRI Contract Intelligence and Prophia leverage a mix of AI, machine learning, and optical character recognition (OCR) to extract and categorize key lease terms, offering portfolio-wide insights.
ChatGPT has made its mark as well. “It’s a fairly standard tool for structuring and crafting narratives,” Sigal said, valuable for both drafting leases and proposals.
AI can even generate lease addendums, like five-year extensions, that save attorneys time during preliminary reviews. Still, Sigal warned that automated documentation isn’t foolproof. “Automated abstraction works 80% of the time, but the remaining 20%—often human-capital intensive—can mute its value,” he said.
#### Data and Analysis
AI’s power lies in its ability to analyze lease terms and financial metrics such as net present value, net effective rent, and gross profit multiple. It also helps landlords and tenants understand customer behavior and demographics.
That said, cleaner data makes for smarter AI. Loomer emphasized that without sound, well-maintained data, AI simply accelerates flawed assumptions. “Without it, AI is just automating bad assumptions,” he said.
Stephanie Skrbin, a broker with Axiom Partners, also cautioned that AI lacks the nuance that comes from direct relationships in the market. “Dealmakers only share information with people they trust,” she said. “AI won’t have the full scope of market info that a human with boots on the ground does.”
Brecher added that privacy and security concerns have led to limitations on using certain AI tools within company platforms.
#### Negotiation Support
AI can support lease negotiations by providing clause language based on previous deals. “It helps teams enter discussions with better context and more consistency,” said Loomer.
Sigal noted that platforms like ChatGPT and Anthropic can coach professionals on everything from negotiation tactics to market gap analysis and client pitches. “Reid Hoffman, LinkedIn’s founder, calls AI an ‘Intelligence Amplifier,’” Sigal shared. “He believes every professional should use AI to realize cognitive gains.”
Still, humans remain essential. “AI is not a substitute for human judgment,” Loomer reminded. It might identify opportunities and accelerate research, but applying context still requires experience and intuition. “The art of the possible still requires human reasoning.”
### Current Issues and Future Potential
While the benefits are clear, AI comes with its share of challenges. Costs of implementation, integration hurdles, and potential algorithmic bias are a few critical concerns.
Users must understand the ethical and legal implications of AI-driven decisions. “Data verification and human oversight are key,” Brecher emphasized.
Relationships remain central to the real estate business. Skrbin stressed: “AI is a valuable resource, but it should never replace picking up the phone and talking to people.”
Even with its limitations, the consensus is that AI is here to stay. “Predictive analytics will improve, allowing teams to model sales performance and occupancy costs with greater precision,” Loomer said. This, in turn, leads to stronger deal structuring and better long-term planning.
Brecher also foresees advancements in tracking, note-taking, follow-up tasks, and email summarization—each offering more efficient, personalized leasing processes.
Ultimately, AI’s value lies in its ability to free leasing professionals from manual tasks and provide actionable insights. As Loomer concluded, “AI gives leasing professionals more time and better information to apply their experience, intuition, and creativity to each deal.”
