Responsible AI: The Cornerstone of CRE’s Next Great Leap

Tal Almog, COO & Head of Product

As the commercial real estate industry increasingly embraces artificial intelligence (AI), the emphasis on responsible usage becomes ever more critical. AI has the potential to transform the industry by enhancing decision-making, streamlining processes, and unlocking new opportunities. However, with great power comes great responsibility. To fully realize AI’s potential, it’s essential to implement it in ways that balance innovation with data security, compliance, and user trust.

The Importance of Responsible AI Use in Commercial Real Estate

In commercial real estate, where decisions can involve significant financial investments and long-term impacts, the responsible use of AI is paramount. AI’s ability to process and analyze vast amounts of data allows for more accurate market predictions, optimized investment strategies, and improved operational efficiencies. Yet, the adoption of AI in this industry must be approached with caution. The decisions made by AI systems have real-world consequences, affecting investors, tenants, and communities. Therefore, ensuring that AI is used responsibly is not just about mitigating risks; it’s about building systems that are trustworthy, transparent, and aligned with ethical standards. At Blooma we believe that AI should be used to do the mundane tasks of gathering and entering data to help humans make decisions, not make decisions for them

One of the key concerns in the responsible use of AI is the potential for bias. AI systems are trained on historical data, which can sometimes reflect existing biases. If these biases are not addressed, they can be perpetuated or even amplified by AI-driven decisions. In the context of commercial real estate, this could lead to unfair practices, such as discriminatory lending or leasing decisions. To prevent such outcomes, it’s crucial to implement rigorous checks and balances in AI systems, ensuring that they are fair and unbiased.

How Blooma’s Human-in-the-Loop Approach Ensures Accuracy and Compliance

At Blooma, we recognize that while AI offers incredible capabilities, the nuances of real estate decisions often require human insight and judgment. This understanding is the foundation of our human-in-the-loop approach, where AI serves as an assistant to human experts rather than a replacement. By keeping humans at the center of the decision-making process, we ensure that AI-driven insights are not only accurate but also compliant with industry standards and regulations.

In practice, this approach means that AI-generated data parsing and spreading (such as, cash flows and rent rolls) is always reviewed by Blooma experienced professionals. These experts consider factors that AI might overlook, such as the unique characteristics of a particular property. In other words, we take a safe approach by not exposing our clients to the AI but rather using the AI to help Blooma professionals serve our clients. In this way, our clients are guaranteed accurate results provided by humans, while our team increases efficiency and can reduce costs by using a large toolbox of AI models to help them in their tasks. This collaborative approach ensures that the final decisions are well-rounded, considering both data-driven insights and human expertise.

Moreover, this method enhances compliance. In a heavily regulated industry like commercial real estate, adherence to legal and ethical standards is non-negotiable. Our human-in-the-loop model ensures that all AI outputs are rigorously vetted, reducing the risk of errors or non-compliance. This approach not only safeguards our clients’ interests but also reinforces trust in AI-driven solutions.

The Role of Transparency in Building User Trust with AI Tools

Transparency is the cornerstone of building user trust in AI tools, especially in industries as complex and high-stakes as commercial real estate. At Blooma, we believe that users have the right to understand how AI systems operate, what data they utilize, and how decisions are made. This commitment to transparency is reflected in our efforts to demystify AI for our users, providing clear, accessible explanations of how our algorithms function and ensuring that users can trace the decision-making process from start to finish.

For instance, when AI tools are used to select the best comps for a property, we provide detailed reports that outline the data sources, the analytical methods used, and the rationale behind the AI’s recommendations. This transparency allows users to understand not just the “what” but the “why” behind AI-driven decisions. By making the inner workings of our AI tools visible, we empower users to make informed decisions and foster greater confidence in the technology. The need for transparency dictates the type of AI models to use. While Machine Learning (ML) is based on model training, typically based on decision trees (thus predictable and transparent), Deep Learning models (Neural networks) often do not offer the pathway to the result (the “why”).

Additionally, transparency plays a crucial role in compliance. By clearly documenting AI processes and decision-making pathways, we ensure that our systems meet regulatory requirements and can withstand scrutiny. This proactive approach to transparency not only enhances user trust but also helps to safeguard against legal and ethical challenges.

Examples of How Blooma Balances Innovation with Safety and Regulatory Standards

Innovation is at the heart of Blooma’s mission, but it never comes at the expense of safety or compliance. Our approach to AI development is guided by the principle that cutting-edge technology should enhance, not compromise, the integrity of the commercial real estate industry.

For example, our AI tools are designed to enhance due diligence processes by rapidly analyzing financial documents and property data. However, we never allow AI to make final decisions in isolation. All AI-generated insights are subject to rigorous human review, ensuring that they meet the highest standards of accuracy and compliance. This balanced approach allows us to leverage the speed and efficiency of AI while maintaining the reliability and thoroughness that our clients expect.

Moreover, we are committed to keeping our AI systems aligned with the latest industry regulations. As regulatory standards evolve, so do our AI tools. We continuously update our algorithms and processes to ensure that they remain compliant with new legal requirements, whether they relate to data privacy, financial reporting, or anti-discrimination laws. This ongoing commitment to regulatory compliance reflects our belief that innovation and safety must go hand in hand.

The responsible use of AI in commercial real estate is about more than just harnessing the power of technology; it’s about integrating AI in ways that respect the values of the industry and the people it serves. By prioritizing transparency, maintaining a human-in-the-loop approach, and balancing innovation with safety and compliance, Blooma is leading the way in setting a standard for responsible AI use in commercial real estate. As the industry continues to evolve, we remain committed to using AI to enhance decision-making, protect user trust, and uphold the highest standards of integrity and ethics.