## Real Estate Round Table: AI, Data, and the Future of the Industry
**Key Takeaways:**
– The real estate industry is undergoing a tumultuous period marked by the rise of AI, increased data consumption, and the potential for regulatory changes related to data ownership and utilization.
– While some traditional sectors, like office space, are struggling with vacancies and depressed values, other areas, such as residential real estate and solar energy development, are seeing growth and opportunity.
– The importance of human interaction and in-person networking remains critical in the real estate world, despite the increasing adoption of technology.
**The Rise of AI and Data Concerns**
The latest episode of the KCO AI Real Estate Round Table, a monthly online forum featuring industry experts, focused on the growing impact of AI on the real estate sector. Panelists, including Dan Wagner, Senior Vice President of Government Relations at Inland Real Estate Group Companies, emphasized the need for increased awareness and education surrounding the 1031 tax-deferred exchange program. Wagner, who is poised to become the Chairperson of the Illinois Chamber of Commerce, highlighted the potential threat to the 1031 exchange posed by President Biden’s budget proposal, which seeks to cap the program at $500,000.
“We’re out there trying to educate people to let them know that’s not a good idea,” said Wagner. “We need to make sure people talk to their members of Congress and highlight the importance of the 1031 exchange.”
The panel also discussed the ramifications of AI’s growing influence on the real estate industry. Darren Hayes, CEO of Code Detectives and a forensic cyber security specialist, outlined the increasing risks of misinformation and cyberattacks, particularly in the context of the upcoming US election.
“The warnings are already out about the US election,” said Hayes. “Misinformation is spreading across social media, and Russia, in particular, has been associated with propaganda efforts.”
The conversation shifted to data ownership and utilization, with Saul Klein, realtor, Meritus State Advocate, and CEO of the MLS in San Diego, expressing concerns about the way MLS data, often used to power real estate platforms, is consumed and monetized.
“The data just because it’s on the internet doesn’t mean everybody can use it,” said Klein. “People are building billion-dollar businesses around the data that comes out of MLSs, and we need to figure out ways to start charging people based on the consumption of the data.”
Klein’s assertion was echoed by other panelists, who argued that brokers, as the primary sources of this data, should be compensated for its use. This points to a potential shift in the industry, where data licensing agreements could become more robust and refined, reflecting the value of the information being exchanged.
**Navigating a Changing Landscape**
While technology is rapidly transforming the real estate industry, panelists emphasized the continuing importance of human connection and in-person networking. Anamaria Perez, SVP Director of Business Development for Inland Green Capital, highlighted the significance of building relationships and establishing trust within the industry.
“It’s so important to build the foundations and make sure that not only you have a plan, but you have the documents to support the plan, and you make the relationships and nurture those relationships along the way,” said Perez.
The panel also addressed the impact of the COVID-19 pandemic on the real estate market. Darren Hayes observed a shift towards remote work and the potential for a mental health crisis, particularly among students who have struggled with social interaction since the pandemic began.
“There is a mental health crisis,” said Hayes. “Down where I work in downtown Manhattan, there are a lot of businesses that have been turned into apartment blocks because people just haven’t moved back to work.”
Dan Wagner, reflecting on the Inland Real Estate Group Companies’ experience, acknowledged the challenges faced by the office sector, citing the dramatic decline in value of the AT&T building in Downtown St. Louis as an example. The panel offered a nuanced view of the market, acknowledging the pain being felt in certain sectors, but also recognizing the opportunities that these changes create for adaptation and repurposing.
“There’s pain, but that pain means somebody’s going to capitalize,” said Wagner. “There will be continued movement.”
**The Future of Real Estate**
The round table concluded with a sense of optimism about the future of real estate, recognizing that despite the challenges, the industry is fundamentally about relationships, human connection, and the value of actionable information. The panelists agreed that the key to success in this evolving landscape is to embrace technology while retaining the essential human element.
“The opposite of opportunity and pain is ongoing,” Andreas Senny, founder of Siri Collaborative Brokerage, concluded. “Let’s help the industry move forward as each of you do in your respective spaces.”
The discussion highlighted the industry’s ongoing evolution, with the rise of AI, the increasing importance of data, and the emergence of new technologies creating both challenges and opportunities for real estate professionals. The panelists demonstrated that navigating this complex landscape will require a blend of technological innovation, human connection, and a keen understanding of the regulations and opportunities that define the changing world of real estate.