April 5-18, 2023 - Page 19 Multifamily A rtificial intelligence and machine learning have dominated headlines recently, particularly with attention sur- rounding ChatGPT. While AI is not new to the multifamily indus- try, its prevalence and applica- tions will undoubtedly grow sig- nificantly in years to come. Our Multifamily Investment Sales team in Colorado spoke with several industry stakeholders to hear how they utilize AI and ML to improve and automate their business. However, first, we went straight to the source to ask Chat- GPT the same question: How are AI and ML impacting the multi- family real estate industry? Artificial intelligence and machine learning are having a significant impact on the multi- family real estate industry. Here are a few examples: n Predictive analytics. Proper- ty managers are using predictive analytics to make data-driven decisions. This technology uses machine learning algorithms to analyze large amounts of data – such as tenant behavior, market trends and building performance – to predict future outcomes. By using this technology, property managers can make better deci- sions about property manage- ment, marketing and pricing. n Automated maintenance and repairs. AI-powered main- tenance and repair systems can analyze data from building sen- sors to predict when equipment may fail or need maintenance. This helps property managers to schedule repairs before they become major issues, saving time and money. n Personalized marketing. AI-powered marketing tools can help property managers to cre- ate targeted m a r k e t i n g campaigns for potential rent- ers. By ana- lyzing data on consumer behavior and preferences, these tools can help property managers to create person- alized market- ing messages that are more likely to convert into leases. n Chatbots. Chatbots are AI- powered tools that can assist renters and potential renters in their search for an apartment. These chatbots can answer ques- tions about available units, pric- ing and amenities, and even schedule tours or lease signing appointments. Overall, AI and ML are help- ing property managers to operate more efficiently and effectively, improve the tenant experience, and increase profitability in the multifamily real estate industry. (ChatGPT, personal communi- cation, March 2023) Some of the industry’s lead- ing innovators have utilized AI and ML in ways that align with ChatGPT’s observations. They are also thinking ahead, consider- ing even broader game-changing applications for these new tools. Origin Investments – a Chica- go-based real estate investment firm with substantial multifam- ily holdings in the Southeast, Southwest and Texas – was dis- appointed by the accuracy of available third-party multifamily rent forecasting tools. So, in 2019, Origin hired its own data scien- tists to build a proprietary model that uses ML to forecast rental rates more a c c u r a t e l y. That effort created Ori- gin Multilyt- icsSM, which utilizes over 3 billion data points to gen- erate astound- ingly accurate results. The model’s rent-growth predictions have proven accu- rate within $10 to $15 annually, according to outcomes back- tested over a five-year period in the 150 largest metro areas in the U.S. For example, the tool predicted 2022-2023 rents within 0.08% of actual rents in Dallas. This AI-powered model boasts more accuracy in rent prediction than any third-party tool because the model can hone in on micro- locations far smaller than a ZIP code. Additionally, the variables that weigh into Origin Multilyt- icsSM forecast vary based on an asset’s location, so no two assets rely on the exact same methodol- ogy. According to Tom Briney, national head of debt invest- ments at Origin, utilizing these forecasts allows the firm to be much more intentional in its time and capital allocation to focus on locations it views as high-growth areas yielding outsized invest- ment returns. Avanti Residential, a Denver- based multifamily development owner and operator, is already using AI and ML solutions to run its business more efficiently and create real opportunities to drive returns to investors. IanAndrews, vice president of innovation and data analytics, explained that Avanti uses OpenAI to replace redundant work in drafting legal documents. Avanti’s legal team can now dedicate time to review- ing and ensuring the accuracy of the documents prepared by an AI-powered machine. In anoth- er recent application, Avanti’s acquisition department consid- ered contracting with a third-par- ty firm to write a highly techni- cal visual basic for applications macro to improve its multifamily valuation model, costing thou- sands of dollars. Instead, Avanti was able to use ChatGPT to code the macro at zero cost. “This is a game changer,” said Jason Wine, Avanti’s vice president of acquisi- tions. “Using this tool allows us to be nimbler and to utilize tech- nology faster, making our teams more efficient. With this technol- ogy, we can quickly adapt our programs with macros that can script incredibly complex sys- tems to automate the underwrit- ing process, allowing our teams to review more opportunities and to do so faster.” Additionally, Avanti uses an AI tool that transcribes meeting notes and delivers concise meet- ing summaries with personalized action items distributed to par- ticipants. According to Andrews, these basic applications are the tip of the iceberg. He is leading an effort to compile all of Avanti’s data points into one centralized source, which OpenAI can then search to answer real-time busi- ness questions like, “Why were landscaping charges elevated in April at our properties in Louis- ville?” or “When does the cable contract expire at our property in Aurora?” Andrews further explained that simple questions like these can often require chains of emails and calls among Avan- ti’s staff when an AI-powered search tool could return accu- rate responses within seconds. “The potential here is just aston- ishing,” said Andrews. “We see tremendous opportunity to cre- ate efficiencies across all depart- ments that will have a real impact on the bottom line.” Weller, a Denver-based multi- family property manager, utilizes AI tools to engage with current and prospective residents while minimizing staffing and pay- roll costs for property owners. Melissa Ryan, vice president of operations and marketing, said that when prospective residents call, and a staff member can- not take the call, an AI-powered voice can act as backup, ensur- ing that no prospect is missed. Ryan is impressed with how well the machine assists with leasing; incoming resident leads can be nurtured by AI tools that respond intelligently to the renter’s needs with text and SMS, providing content and a call to action until the team is agent-ready. AI and ML are emerging tools with unprecedented applications in all industries. It is exciting to see innovators and leaders in the multifamily sector embracing these new tools and technologies to improve their businesses and communities for residents. The technological AI and ML revolu- tion is just beginning, and early adopters will be rewarded in the coming years. s Artificial intelligence, machine learning use grow in MF Craig Ratterman Transaction manager, Newmark Multifamily Capital Markets Courtney Crowder Managing director, Newmark Multifamily Capital Markets This is the third deal we've closed with Capstone in the past year, and we look for- ward to continuing our work together.” n AURORA — Legacy Part- ners and its joint venture part- ner, Griffin Capital Co., broke ground on a new 380-unit apartment community. Adjacent to the Sable light- rail station and near I-225 and Highway 83, Legacy Metro 525 will offer a mix of studios and one-, two- and three-bed- room apartment homes, with an average size of 846 sf. The community will offer several amenities, including a large clubroom with a catering kitchen, a sky lounge and sky deck with unobstructed views of downtown Denver and the Front Range, a pool table, seating and dining areas, bike and resident storage rooms, a fitness center, a pool and spa, a dog wash and park, two courtyards with a community garden, and electric car charg- ing stations. It is anticipated for comple- tion at the end of 2025. Lane Cutter, senior managing direc- tor at Legacy Partners, said in a press release, “Legacy Metro 525 will be a market-leading multifamily project in Aurora, offering our residents large state-of-the-art homes, the latest in modern amenities, and excellent access to major employers and outdoor recre- ation. As an added communi- ty benefit, we will be engaging with Denver's noted exterior art consulates Nine Dot Arts to curate incredible art experi- ences, as well as with local art- ists to give Metro 525 a unique character befitting its excellent design.” KTGY is the architect for Legacy Metro 525. The devel- opment team includes general contractor Catamount Con- structors, MEP contractor Jor- dan & Skala Engineers, struc- tural engineer S. A. Miro and civil engineer Kimley-Horn. “Legacy Metro 525 repre- sents our sixth collabora- tion with Legacy Partners," said Griffin Capital Presi- dent Eric Kaplan. “Together, we have successfully devel- oped exceptional and sought- after living experiences, and we anticipate providing yet another outstanding residen- tial asset in the high-growth market of Aurora upon its completion.” s Embrey Continued from Page 18 Elken with Elkco Properties, who were unrepresented. Built in 1967, Cedar at Wash Park is located at 188-198 S. Clarkson St., and the units feature granite countertops, carpet, and tile floors. Tribe Management will manage the property. “The buyer was interested in the property because of the great location and bet- ter-than-market assumable financing,” stated Sanders in a press release. “Leale Capital and Elkco Properties intend to complete a full renovation program to the units to get the rents up to a market level. The existing Chase Bank loan was a 2.97% interest rate with two years of interest-only pay- ments remaining which cre- ated significant value on this transaction as well.” At the time of the sale, the property was 94% leased. s Denver Continued from Page 16