AI in Multifamily Real Estate

AI in Multifamily Real Estate

By: Joshua Eng

Introduction:

The AI “boom” in recent years has caused undeniable efficiency improvements in

sectors like healthcare, education, and even transportation. Multifamily real estate

(sometimes shortened as “multifamily”) has long struggled with many inefficiencies of its

own. Property management spends time screening tenants, turning over units, and

optimizing rent. Meanwhile, tenants have to wait during this leasing process, causing

stress before they even step foot into their supposed new home. With AI revolutionizing

nearly every industry, it might be time for multifamily to take its turn.

This article will explore how AI implementation has affected the multifamily real

estate industry, how it can affect the industry in the future, and how AI in multifamily can

affect general society.

Current Uses of AI in Multifamily:

Firstly, let’s take a look at how AI is already impacting multifamily. In terms of

property management, AI tools have recently come out that promise to make

management easier. Firstly, AI-powered chatbots can respond to prospective tenants

instantly. In addition, smart scheduling software has proven to automate rent collection,

maintenance requests, and showings, improving efficiency. On the financial side of

multifamily, AI tools such as Cash Flow Portal and IntellCRE have come out that can

underwrite properties. Models can now analyze historical rent data, occupancy trends,

market conditions, and, of course, cash flow to project apartment values.Case Study “Nova Park Apartments”:

To project AI’s future impact, we can analyze data from Nova Park Apartments, a

multifamily complex in Garland, Texas, containing 198 units. We will use data collected

from November 28, 2024, to July 9, 2025. From the data collected, we found that there

were 340 chat messages by 37 unique users, and four tours were scheduled. We also

found that tenants tend to appreciate the convenience and 24/7 availability of AI for

common questions and scheduling tours. However, many prefer a human follow-up for

more detailed or personal inquiries. To estimate broader implications, we will have to

assume that:

1. Time per interaction: Before AI, each message takes approximately 5-10 minutes

of staff time to respond and 24-72 hours for tenants to get a response. After AI,

both drop to approximately 0 seconds. For our extrapolation, we will assume

each message takes 7 minutes.

2. Property management: Staff get paid approximately $60,000 per year for

apartments similar to Nova Park.

National Extrapolation:

Since AI leasing chatbots can save about 7 minutes per message, with 340

messages, this saves property management staff about 35 hours over 8 months, which

is about $1,015 in labor costs. Now, if we extrapolate AI adoption to all 40 million units

nationally, labor savings alone could reach approximately $306 million annually. Labor

savings could increase past this number if we factor in paid onboarding time (2-4

weeks). With AI, apartments could also decrease onboarding expenses, leading toapartments saving approximately $3500 per property manager they would typically have

to train. Furthermore, if apartments similar to Nova Park adopt additional aspects of AI,

such as predictive maintenance, approximately $10 billion annually in operational costs

could be saved.

Limitations for broader implications:

1. 2. 3. Nova Park is a mid-sized property in Texas. Therefore, results may not directly

scale to apartments of different sizes or in different regions.

The data period is only 8 months. Therefore, seasonal fluctuations in

leasing/maintenance could affect results.

Extrapolation assumes prospective tenant behavior and AI speed to be the same

across all properties.

Unlikely Potential uses of AI and their effects:

Now that we have covered how current uses of AI have and could affect

multifamily, we can take a look at some more uses that are not available on the market

yet and how they could impact multifamily.

1. Predictive Amenity Budget Allocation

By implementing motion sensors within every amenity, apartments could track

tenant usage and then use AI to allocate budget towards amenities effectively. For

example, if Nova Park apartment’s tenants really liked going to the gym, then Nova Park

should allocate the budget towards new weights rather than a renovated pool. Thiscould increase tenant satisfaction and retention as well as save thousands on

renovation costs over time.

2. Psychographic Tenant Pairing

By taking data from tenants, such as sleep schedules, dietary habits, and even

sleep schedules, AI could effectively match tenants with roommates that they will be

more willing to room with long term. This would increase both tenants' satisfaction and

retention as well as save turnover costs per unit.

Future Implications:

Now that we have looked at both current-day and future uses of AI in multifamily,

let’s talk about how widespread AI adoption will affect the multifamily industry as a

whole as well as society.

Industry effects:

Widespread AI adoption could transform how property management and the skill

required to be employed in the industry. Necessary tasks like scheduling tours,

responding to tenants, and basic data entry could be entirely automated before 2030.

This could inevitably lead to a decline in entry-level positions and an increase in

demand for AI-skilled workers like AI System analysts. Overall, this will most likely lead

to multifamily owners opting for a reduced leasing staff.

Affordability and Investment Incentives:On a broader scale, the efficiency gain from AI can affect more than the cash

flow of real estate owners; it has the potential for rent increases to be more moderate.

With a decreased amount of payroll expenses, owners could reduce rents while still

maintaining the same margins. This could happen due to pressures from consumers

recently wanting more “human connection" over AI work, with AI-managed properties

potentially being cheaper in the near future. In addition to affordability incentives, AI

tools could allow investors to more accurately forecast cash flow with the use of

financial AI tools. Investors may also invest in more multifamily deals due to the

potential for higher cash flow from lower payroll costs. This increased investment and

affordability incentive could potentially relieve housing shortages in traditionally

high-demand markets like New York or Los Angeles.

Potential Downsides and Mitigations:

With AI integration, potential privacy concerns could occur with

“over-enthusiastic” adoption. For instance, going back to the earlier idea on motion

sensors tracking tenant movement for predictive amenity budget allocation, some

tenants may see the sensors as an invasion of privacy. In addition, even when potential

tenants are applying for a lease, AI is known to discriminate against certain racial

demographics. Lastly, many tenants may prefer the “human touch” to property

management. They want to be able to see another human face when they go into the

leasing office, not a chatbot. This desire for human touch could potentially lead to

“Anti-AI” apartments, where tenants who do not want to live in an AI-controlled

environment could live. However, these “Anti-AI” tenants would most likely have to paymore, since those apartments will inevitably lose out on the net income gain from AI

efficiency.

Global and Societal Impact:

Outside of the United States, AI in multifamily could impact developing countries,

government policy, and, similarly to the U.S., housing. In developing countries, where

property management is less experienced and formalized, AI could increase efficiency

to a greater extent than in the United States, where technology is a lot more integrated

within management already. In addition, although it is impossible to know the amount of

multifamily units in developing regions due to unstandardized data collection, housing

shortages are prominent within developing countries, such as those in Sub-Saharan

Africa and Southeast Asia. In addition, many property managers in these developing

regions still rely on traditional pen and paper forms of bookkeeping and often have

informal “handshake-style” agreements with tenants. By improving these countries'

access to technology and AI, it could digitize rent collection, tenant screening, and data

collection, which would legitimize the properties for foreign investment. With increased

foreign investment, housing could potentially increase, leading to relief for many

overcrowded cities in developing regions. Right now, housing deficits in Sub-Saharan

Africa are anywhere from 50-100 million units, and Southeast Asia is estimated to need

50 million units to meet housing demands. AI and subsequent foreign investment could

be a potential solution for these regions to provide adequate housing.

Of course, there are limitations to consider with this. Many developing countries

still have inconsistent access to technology, let alone AI. In addition, aforementionedprivacy concerns would be even more prominent in developing countries with looser

data privacy laws and less digital security. Still, the possibility of AI making property

management in developing countries on par with developed countries is exciting to think

about.

Conclusion:

AI in multifamily real estate has the potential to transform every aspect of the

industry, beyond the leasing chatbots of today. The data from Nova Park Apartments,

although limited, demonstrates how even basic technological increases can generate

significant savings in time and labor cost. When scaled to the national level, these small

increases compound into billions. AI does not just have the potential to help managers

and owners; however, it has the potential to lead the market into being more equitable

and accessible as property management becomes more accessible and new multifamily

development is incentivized by lower expenses. Alongside the industry, the workforce

will have to transition away from soon automatable tasks to become more technically

capable. Globally, AI could narrow the gap between developing and developed

countries’ property management. If, hypothetically, AI improves the efficiency of

multifamily by 10% per year, how long until the industry we know now is

unrecognizable? Is that a good thing? We will just have to wait and see.

Acknowledgements: This article was reviewed by Peter Cachion, research assistant for

Wharton Professor Geczy. Data for the Nova Park Apartments case study was provided

by Shonda Huber, Vice President of Sales at Apartments 247.

How Blockchain Technology is Revolutionizing Real Estate

By: Elijah Levine

Whether you believe in the actual technology or have just heard about it through the general hype (or one of our below articles), it appears that blockchains and cryptocurrencies have now touched pretty much everybody’s life in one way or another.

Of course, everybody’s involvement is not the same. Some people might have downloaded an app on their iPhone to purchase some $BTC or $ETH (or even just to observe them), while others are deep in Solidity, Ethereum’s native coding language, building smart contracts to decide outcomes, infrastructure, fundraising, and governance, and more on numerous projects around the world.

What is a smart contract? Glad you asked, smart contracts are electronic contracts written in code that decide outcomes algebraically based on inputs, proof of information, or other required actions.

Many of the new layer-1s, such as $ICP and $ROSE, have easier to use and even more scalable smart contract capabilities than $ETH.

The possibilities of this technology are truly limitless as it is so applicable across industries. From government to real estate, music to gaming, auditing, healthcare, and more, the world is in need for major technological upgrades.

For centuries, we have observed business infrastructure and the legal system fail thousands of people around the world, data be mismanaged, and blatant fraud occur at all levels of private and public sectors alike.

Modern technology like blockchains and smart contracts are slowly but surely changing all of this, and a couple key players are leading the way.

In this article we will focus on those leading in the world of real estate. 

To begin, I want to introduce the concept of a Decentralized Autonomous Organization (or “DAO”), which is one of the rare environments in which true decentralization, and therefore true democracy, can occur (if set up properly).

A DAO is basically an LLC that is governed via smart contracts and verified on the blockchain. Proper DAOs are registered with the state they incorporated in (only Vermont and Wyoming legalized DAOs thus far). A perfectly decentralized DAO would have a myriad of members and every member would have one vote.

Modern decentralized frameworks like DAOs have made the securitization of assets even more popular. At first, this securitization happened almost exclusively in the form of tokens (and many still do), but now more and more creators are looking towards even better solutions like DAOs, Non-Fungible Tokens (or “NFTs”), and other decentralized frameworks to securitize various assets.

It sounds complicated but it’s not. Most people don’t understand how many “NFTs” already exist out there and how many are used daily.

Some familiar examples (both physical and digital) are receipts, tickets, watches, TVs, food, basically anything that is uniquely identifiable (think serial numbers) and could in theory be traded. Of course, you would never make an NFT for food unless you planned on never eating it, because as soon as you ate it, it would cease to exist – although this could be thought of as a burn function in NFT lingo – just like you would never (or at least rarely) trade your food.

On the other end of that spectrum, your data that big tech companies are tracking and storing are also NFTs. Each data log of what specific websites you clicked at what specific times, or any and every other action you’ve ever taken online, is unique to you and immutably stored in one of Facebook, Google, and / or Apple’s data centers. 

I believe that Web3 will not only bring the importance of data ownership to the attention of everyday people, but also allow those people to understand and participate in it. A growing amount of people are already starting to use NFTs, DAOs, and other modern decentralized frameworks in evermore creative ways.

Take Balcony DAO, for example, a group working to tokenize shares in investment properties through NFTs.

Not only does each person’s individual NFT represent their share of ownership in that given property, but they are working to build out the ability to deliver “data rooms” to investors via specific, KYC-ed NFTs.

The main benefit of this would be that those on both sides of the equation (the data viewer and the data provider) are certain of each other’s identity, but it would also create a more streamlined, secure, and organized way to view, compare, and continuously reference important diligence material.

Tokenizing real assets (and even fractionalized ownership of them) is not necessarily something that new, but delivering immutable, KYC-ed information through that tokenized asset (or even alongside it) is extremely novel, interesting, and promising for the space. 

Even large institutional groups, like KKR, have been securitizing funds through tokens, but securitizing assets, even with tokens, still falls in the pretty traditional finance world- even though it is very cool and exciting to see more large institutions using blockchain technologies to do this.

More intangibly, we’ve observed “Metaverse” companies of all shapes and sizes pop up during the last few years, especially with the continued popularity of blockchains and online media.

That said, not many groups have done it all that well. The Sandbox might have reached mass consciousness and attracted major celebrities, but their platform looks like a crappy, half-developed game from 2010 or earlier.

These stylized facts become apparent in the data.

As of October 10th, 2022, The Sandbox had 616 Daily Active Users (DAUs) and Decentraland, another Metaverse product that was massively popular during the last few years, had just 23.

Blockcities, on the other hand, has developed infrastructure for the real world while leveraging the “Metaverse” in the process.

Designed to be a bridge between digital and physical worlds, Blockcities has created a digital twin of the earth to visualize and synchronize future upgrades in the real world. They did this by overlaying the entire world with high resolution Google Map images broken out into hexagonal land parcels that investors can purchase to own “land” in the Blockcities Metaverse. 

All functionality is facilitated through smart contracts, with the ability to be exported as widgets that can show up in other systems. In the future, this will look like pins tied to real world locations, each pin with unique utility.

The plan is for all current functions of cities to occur in a much more efficient, transparent, and technology-enabled way. This includes everything from voting to bidding on open community projects, analyzing properties available for rent and purchase to owning shares of real world assets, and more.

While these functions may appear in a “Metaverse” setting, Blockcities has been built to integrate the physical world into functionality and application as much as possible. 

At this point, it’s very important to understand that each of these tech platforms is and should be considered its own “Metaverse,” and that the word “Metaverse” really just describes any digital platform that allows users to interact simultaneously in the same place – even Instagram and Snapchat are examples of Metaverses in the truest sense of the word – although digital twins and AR / VR have pushed us towards accepting more of this new tech as the modern “Metaverse.”

Blockcities is doing a lot differently than many other Metaverses that I find particularly interesting. The first thing is that it’s structured as a DAO based on land ownership, which is very rare for Metaverse projects.

While many other projects have focused on community, Blockcities has focused on community but also utility for investors, starting specifically with governance. They are working to partner with local governments for the governance of Blockcities-owned parcels to be settled on-chain.

Establishing strong or at least some sort of communication between local government and highly modernized technology will happen eventually. The sooner that work starts, the higher chance of success, alignment, and progress on things we care about.

There are big problems facing us all, but tech can help us solve them.

Blockcities also encourages real ownership alongside digital ownership and has plans to deliver additional tangible benefits other than governance and community to landowners over time. Like many other Metaverses, there is a fee share for others doing things on (or sometimes even just visiting) your land in the virtual world.

Outside of the virtual world, Utah-based startup Estate Chain is one of many groups helping settle physical real estate transactions in crypto. However, Estate Chain and most of the other companies mentioned so far in this article are relatively new and / or startup companies. There are large groups in the space that have tried and true technology as shown by their transaction volume.

One company, called Propy, has done over $4B in transactions since its founding in 2015. Propy helps users settle transactions in crypto, ensure proper property title diligence and transfer, and even turn houses into NFTs.

As more and more groups continue to build and innovate in the space, it’s extremely exciting to see smart executers utilizing modern technology and working together to progress the tech-enablement of outdated industries.

How Blockchain Has Revolutionized Real Estate Investing

By: Leah Golubchik

Although the real estate industry has traditionally depended on face-to-face interactions, firms have been forced to reshape their structures due to the Covid-19 pandemic. As the real estate market continues to adapt to changes in response to the pandemic, the industry has become more reliant on technology in all sectors. One of the newest advancements to make its way into the field is blockchain, which has revolutionized the real estate market. This digital-asset craze has continued to skyrocket over the past few years, and has infiltrated both personal and commercial real estate investing.

Real estate investing has numerous drawbacks that prevent structured and accessible movement of transactions. For example, the industry has high barriers to entry due to extremely high capital requirements. Further, economies of scale play a part in real estate investing, as well-connected firms and individuals have access to greater opportunities, which can even include off-market transactions. Lastly, real estate is vastly illiquid, making it hard to divide and convert its value, therefore it is usually not owned in shares.

However, as this new technology penetrates the market, such disadvantages of personal and commercial real estate investing seem to shrink. Blockchain allows for a streamlined system of both information and value that anyone is able to obtain, as it is not possessed by a single entity. Furthermore, it eliminates the need for a middle man through smart contracts, which allow assets to be tokenized and be traded on the blockchain. This reduces the fees and commissions that these intermediaries charge, and makes the process much quicker. The decentralization of blockchain makes it highly transparent and immutable, which establishes that processing of financing and payments is more secure. The illiquidity issue is also solved with this technology, as tokens allow for real estate to be easily traded. This also opens up the opportunity for crowdfunding and fractional shares, as more investors will be able to participate in deals due to lower ownership liabilities and capital requirements. All of these advantages of blockchain lower the barriers to real estate investing and ensure the entire process of buying and selling these assets is dynamic and efficient.

The benefits of implementing blockchain into real estate investing are clear, but how have these developments emerged in the real world? Just earlier this year, the mayor of Miami suggested authorizing residents to pay property taxes or city fees with cryptocurrency. Soon after that, an anonymous buyer purchased a Miami penthouse paid fully in cryptocurrency for $28 million, which was declared “the most expensive known residential crypto real estate transaction in the U.S. to date.” In the commercial world, commercial real estate investor Aviva Sonenreich describes how online marketplaces are influencing this sphere, “For example, ATLANT is a platform that tokenizes properties; the trading can all be done online, and the tokens can be exchanged for fiat currency. From my perspective, understanding the value in tokenizing real estate is just the tip of the iceberg when it comes to the future of partnerships and investments on the blockchain.” New technological developments in the real estate industry are appearing everyday, and everyone is anticipating what the future of real estate transactions on the blockchain will look like.