The AI inflection point - Charting a new course for CRE valuations

AI is emerging as the ultimate force-multiplier in CRE valuations

Technology has always been a disruptive force, but in 2025, the scale and scope of digital innovation has permeated across virtually every industry and operational process. Artificial intelligence (AI), specifically, remains firmly center stage as tools like ChatGPT, Gemini, and CoPilot reinvent everyday practices at a near-blistering pace.

Unsurprisingly, AI is now positioned as a critical force-multiplier in the world of commercial real estate (CRE) – a powerhouse toolkit capable of handling repetitive tasks so CRE professionals can refocus their expertise toward higher-impact activities and analysis.

In the latest installment of our CRE Innovation Series, host Jamilah Caballero, Customer Success Manager at Altus Group, was joined by her guest Justin Gohn, MAI, SRA — Principal at Gohn and Company and 2025 President of the Philadelphia Metro Chapter of the Appraisal Institute — to discuss the transformative impact of AI on CRE appraisals, from lease abstraction and data analysis to quality control. Moving forward, AI should be viewed not as a threat, but as a collaborative partner that lets CRE experts rise as the industry inevitably evolves and modernizes.

How AI Is reshaping the CRE appraisal process

In the world of CRE, there are plenty of time-consuming tasks that require little technical expertise and, therefore, could be described as ‘low hanging fruit’, ripe for AI-powered disruption. After all, AI’s standout strength is its speed in transforming unstructured data into actionable intelligence. Tasks that once required significant time and manual labor — such as abstracting lease agreements or parsing zoning codes — now take minutes. “With AI, that 45 or 50 minute job is now a three or four minute job,” Gohn observes. AI’s analytical power is also revolutionizing how professionals work. "If you have a data set, AI is exceedingly good at extracting insights and even doing a multiple regression analysis for you, creating charts and visuals,” he adds. These capabilities make CRE professionals more efficient and broaden their creative possibilities.

Appraisers also stand to benefit from the use of Retrieval Augmented Generation (RAG). “You take a powerful LLM and you plug it into your internal data, with all the appraisals and market studies you've done over the years, and then you can have a conversation with your data,” Gohn explains. “It just makes retrieving data from your internal knowledge base that much easier.” For those ready to take another step up the ‘elevator of complexity’, fine-tuning open source AI models with internal company knowledge allows you to essentially infuse your knowledge into the DNA of the AI model. This, in turn, enables even deeper insight and discovery. “It becomes very easy to communicate with your information, to extract insights, to find hidden connections in your internal data that maybe you never knew existed,” he adds.

Looking ahead, appraisers can leverage AI to become “master conductors,” orchestrating autonomous AI agents. In this vision, the appraiser commands AI for gathering data and analyzing digital twins of properties, then assembles the appraisal report as the elite knowledge worker, now capable of higher-level cognitive reasoning and abstract thought. “Ultimately, the human expert’s value will lie in exercising judgment and translating complex AI findings into client-ready insights,” Gohn explains.

The AI automation advantage

Of course, large-scale AI adoption often sparks anxiety, as some in the industry may view automation as a threat to their workload or fees. Gohn, however, believes the implementation of AI will have the opposite effect. With AI managing repetitive “data grunt work,” the demand for quality appraisals will increase. “Instead of getting updated valuations every quarter, stakeholders and portfolio managers may want updated valuations every month or every week, or maybe even every day… and you can identify the hidden risks in the system before they build up.”

This shift allows appraisers to focus on more creative, high-level cognitive work. “It leaves the door open for you to do more, and you have more time to do it,” notes Caballero. While AI excels at repetitive tasks, it cannot replace the abstract reasoning essential to appraisal work.

This point is perhaps best illustrated by history; over the decades, digital infrastructure has steadily improved – and demand has only increased. “As internet connectivity became faster and cheaper, that drove more internet use. Same thing with cloud storage – as it became more affordable, cloud storage has become more omnipresent and more popular,” adds Gohn. “There are plenty of examples of this, and I think it’s exactly how it’s gonna play out in real estate valuation as well.”

Transparency is key in the age of AI

As AI becomes standard in real estate appraisals, transparency must remain a core pillar. “Anytime AI will play any type of role in any appraisal that I'm doing, it gets disclosed,” says Gohn. “If you were to look at most appraisal reports, there's usually a section disclosing what data sources were used. Disclosing the use of AI is simply an extension of that long-standing practice.”

Clients’ main concern, Gohn notes, is not about the use of AI – but the quality of the report being delivered. Is it credible? Well-supported? Logical? Despite some mandates placed on the use of AI (particularly banks or certain lenders), Gohn believes these restrictions won’t last. “Those that are putting those limitations on appraisers will eventually, inevitably have to drop those types of requirements as the technology becomes omnipresent.”

Verifying AI-generated information is also becoming easier, especially with tools like deep research, which provide very detailed reports and cited sources. “If I'm reading a report and it says that vacancy rates in Center City, Philadelphia, in the office market are at 15%, it will back that claim up with a link to its source so I can double check what it is,” Gohn explains. “This reduces friction and enhances trustworthiness, as users can reason over the data and double-check it before they use it.”

In many ways, collaborating with AI is similar to working with human colleagues. “If I have a junior appraiser working for me, I don’t just copy and paste what they’ve given me,” he adds. “I take that information, I read over it, I verify it, and I engage in a back-and-forth with my human colleagues. I treat AI-generated information the exact same way.” In this way, AI can be viewed similarly to a first-year analyst — it is a supportive tool whose work must always be reviewed and validated by human expertise.

Crucially, AI is also enhancing diligence and accuracy, as it can catch inconsistencies that humans might miss, such as a wrong digit in a parcel number deep in a report or an unintentional omission in an adjustment grid.

Can CRE appraisers use AI securely?

Client privacy remains a leading concern for appraisers leveraging AI, and rightfully so. Fortunately, Gohn notes, there are tested ways to use AI securely, and many businesses in sectors where confidentiality is paramount (such as law and healthcare), are already leading this charge. Consider the enterprise solutions with privacy assurances, such as OpenAI’s enterprise plans or Anthropic’s SOC 2-compliant offerings. What’s more, simple measures like redacting confidential details before running documents through AI models can provide added security.

“Combining technical safeguards with practical diligence will allow appraisers to benefit from AI without sacrificing professionalism or confidentiality,” Gohn explains. “If these other businesses can do it, so can we.” By viewing AI as a force-multiplier rather than a threat, appraisers can free themselves from routine tasks and focus on the higher cognitive work that defines their true value.

The future of CRE is both AI-powered and human-centered

If there is one sentiment Gohn hopes to instill upon CRE appraisers today, it’s this: Don’t be fearful of AI. It’s not coming to take your job. “The idea that if you don’t grab what’s yours right now, then you’re going to miss out – it’s just really not how the world works,” he elaborates. “We live in a much more abundant world than that, and CRE appraisers should get comfortable with the idea that their best days are still ahead.”

Ultimately, AI isn’t here to replace valuation professionals – but it is here to support the profession while enhancing its unique, human value. “AI will help us to save time and focus on what really matters, which is our judgment, our insights, and our relationships with our clients,” Caballero adds. “And honestly, no machine could do or replace that.”

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