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As artificial intelligence continues to transform commercial real estate, Bob Knakal argues that the competitive value of information is declining while the value of judgment is increasing. Data that once required years of experience and extensive research can now be accessed and analyzed almost instantly. The real differentiator is increasingly what professionals do with that information.
AI can evaluate comparable sales, rents, expenses, zoning, cap rates, financing and other variables to produce a credible valuation. But determining whether an owner should actually sell requires understanding their debt, taxes, partnership structure, goals, risk tolerance and alternatives for the proceeds.
When multiple buyers submit competing bids, technology can organize and rank the offers. Judgment is needed to evaluate financing, equity, closing certainty, investment committee approval, retrading history and the buyer's ability to navigate a difficult transaction. A slightly lower offer may ultimately provide a much greater likelihood of closing.
AI can identify dozens of statistically similar transactions. Experience helps determine which comparisons are actually meaningful. Strategic motivations, unusual financing, seller circumstances and development potential can make a transaction materially different from what the raw data suggests.
For vacant properties, AI may estimate value based on investment returns. But a user such as a school, hospital, university, nonprofit or corporation may place a much higher value on the property because of its strategic importance. Identifying that buyer requires understanding motivations beyond financial metrics.
AI can identify zoning, floor area, permitted uses and development potential. Judgment can identify possibilities that are not obvious in the data, such as assembling neighboring properties, acquiring air rights, restructuring easements or solving tenant-related obstacles.
Modern databases can produce thousands of owners and property records almost instantly. The challenge for a broker is determining which owners deserve attention today, which situations are changing and which past conversations warrant another call.
Knakal's most important distinction is that AI is highly effective at answering questions, but experienced advisers help determine whether the right question is being asked. A question about a property's value may actually be a question about an owner's broader financial, personal or strategic objectives.
After more than four decades in New York City investment sales and thousands of transactions, Knakal's advantage is not simply access to information. It is the pattern recognition developed by watching decisions play out over time.
He has seen buyers overpay and succeed, sellers reject offers they later regretted, seemingly certain transactions collapse and seemingly impossible deals close. Those experiences create a level of judgment that cannot be replicated simply by providing an AI system with more data.
“AI can shorten the distance between a question and an answer. Judgment shortens the distance between an answer and the right decision.”
The central lesson is that AI does not eliminate expertise. As information becomes increasingly accessible, genuine expertise may become even more valuable because professionals must distinguish between information that is available and information that actually matters.
AI is making property, ownership, transaction and market information faster and easier to access and analyze. This reduces the advantage historically created by simply possessing information.
Judgment incorporates context, experience, motivations, risk, relationships and knowledge of how similar situations have actually played out. It helps determine how much weight to give information and what decision should follow.
The highest bid may come with greater financing risk, limited closing certainty, investment committee requirements or a greater likelihood of retrading. Evaluating the probability of closing can be more important than maximizing the headline offer.
Users may value a property for strategic reasons beyond its investment return. The property may improve their business operations, visibility, location or long-term strategy, creating value that traditional investment metrics do not capture.
As AI makes information increasingly accessible, competitive advantage shifts toward judgment. The ability to interpret information, recognize patterns and make the right decision becomes more important than simply having access to the data.
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