Real estate is transitioning from isolated tools to whole workflow transformation thanks to agentic AI, which is creating new value, redefining roles, and changing how businesses function.
The use of AI in real estate is growing. Organizations in the sector are using tools to assist investment decisions, read leases, and prioritize maintenance needs. However, these initiatives frequently stay disjointed, concentrating on enhancing specific processes rather than changing the way work is actually completed.
These days, forward-thinking leaders are switching from technologies to workflows. They are beginning to reimagine entire domains, including leasing, operations, and asset management, and redesign them end to end with people and agents collaborating, rather than adding AI on top of already-existing processes. The future of real estate will be determined by that change.
There might be a big impact. AI may unlock up to $550 billion in value throughout the real estate value chain, according to estimates. Reimagining workflows, giving human judgment priority, and scaling new operating models will be more important in capturing that value than implementing technology.
In this Explainer video, Alex Wolkomir, Ankit Kapoor, and Vaibhav Gujral of McKinsey talk about how AI is already adding real value to the real estate industry, what distinguishes true transformation from piecemeal experimentation, how the domain approach is changing entire workflows, and what leaders need to do to fully seize the opportunity.
For clarity and duration, this interview has been modified.
What prospects does AI have in the real estate industry?
Alex Wolkomir: There is a huge possibility that might completely change the way the sector operates. The McKinsey Global Institute estimated $430 billion to $550 billion in value creation after analyzing labor productivity and AI applications for tasks along the real estate value chain. That is very revolutionary.
Ankit Kapoor: In my opinion, work automation and occasional use case solutions are not the greatest opportunities for AI to add value in the real estate industry. In reality, it is considering a domain transition. We define “transforming a domain” as the deployment of a number of coordinated agents that gather data, create outreach, synthesize findings, and update systems.
Vaibhav Gujral: The application of AI in real estate is still in its infancy. Even if we are most likely in the first or second innings, real estate companies’ P&Ls (profit and loss) are being affected by a significant amount of value. This is evident on both the cost and revenue sides of the equation.
What distinguishes transformation from experimentation?
Vaibhav Gujral: Businesses undergoing genuine change are doing three things that others aren’t. The first is that they are connecting the investments and advancements in AI to actual P&L effects. As a result, they are able to gauge gains in maintenance request timeliness, cost savings, and leasing time reduction.
Ankit Kapoor: Senior company ownership is essential. AI should be viewed as a fundamental strategic effort with actual investment and a cross-functional mandate throughout the company rather than as an additional tool.
Alex Wolkomir: Usage is not a goal for early instruction. Everyone doesn’t need to have an agent or activate the tool for AI to be successful. Being able to respond to questions like “Do we convert leases at a higher rate, did we get faster turnaround on a maintenance ticket, and did we reduce vacancy days?” is what defines success.
Many executives focus on the incorrect success metrics. Even though 95% of people open my AI product and think it’s fascinating, is there any real benefit to using it?
A domain approach: what is it?
Alex Wolkomir: Use cases are too tiny, and enterprise is too large when considering a domain strategy. Use cases are discrete stages that don’t connect, and enterprises are complicated to change all at once. Domains are complete workflows that may be completely redesigned, such as taking a lead from the initial call to signing a lease.
Ankit Kapoor: You can truly achieve transformative change across KPIs by attacking real estate at the domain level. Results like net operating income [NOI], operating costs, and cycle durations start to improve by 10, 20, or 30 percent when agents are coordinated over a full workflow rather than just one step.
Vaibhav Gujral: Workflows are being completely redesigned by organizations that have a significant influence. They are not merely deploying copilots and picking up particular use cases or activities. They are examining the entirety of the job completed and posing basic queries about whether it is necessary and how it might be automated.
Financial reporting is a straightforward example. Organizations are cutting between 60 and 80 percent of the time that goes into that process by going all the way from data aggregation to data compilation to offering customized reporting to different stakeholders. Rather than automating a particular operation, it is a complete overhaul of a workflow.
Where does AI now add value?
Vaibhav Gujral: In some fields, particularly those with high human intensity and repeated jobs, we are witnessing observable value. The first is focused on revenue-oriented operations and leasing on the front end. The second is property upkeep and operations, which includes hiring technicians. The third is in back-office tasks that involve a lot of paperwork or manual reconciliation, such as financial reporting and investment activities.
Alex Wolkomir: A few spring to mind when I consider various fields with genuine worth. One is facilities and maintenance, where you can assign the appropriate personnel, prioritize tickets, and find faster solutions. Another is leasing, where you can increase lead generation and stop leakage by switching from a 9–5 paradigm to a 24/7 engagement one. For instance, all of the rich data and documentation in asset management originate from properties that you may begin to comprehend to make more scalable decisions.
In an AI-powered organization, how will positions change?
Alex Wolkomir: I really think about those human moments that matter when thinking about the role of people in an agentic, AI-powered business. I probably don’t want AI if I have two feet of water on my floor at three in the morning; instead, I want someone who will be sympathetic and responsive.
How should organizations begin?
Wolkomir, Alex: First, it’s important to fully comprehend each of the various fundamental processes. We often consider this in terms of large workflows, or what I refer to as domains. Therefore, consider things like the leasing experience, what it means to take a maintenance ticket from opening to closure, and how you need to take those elements and thoroughly comprehend the process itself, not just the technology.
Ankit Kapoor: What some real estate companies consider to be their unique approach to operational excellence could eventually become standard practice. As a result, everyone’s expectations are raised. The internal trial data that businesses collect, which is specific to them and can set their AI systems apart from those of competitors, will begin to take center stage as the new competitive advantage. What kind of human-in-the-loop learning and continuous improvement input does a business use? And how frequently do people really use these?
What will real estate look like in the future?
Alex Wolkomir: In the future, platforms might appear in a manner that was previously unattainable. In other words, there is currently a tremendously dispersed ecosystem of capital providers, including owners, operators, and technology suppliers. But in a world where capital is known to favor those who not only own but also run their own businesses and possess that operational know-how, does that start to look very different?
Vaibhav Gujral: Businesses, tenants, and inhabitants of real estate assets will have a far better experience. Businesses will receive solutions that are far more suited to their requirements. Retailers will have a better idea of where to put their store in the mall and what kinds of customers are most likely to visit and make money there.
Investors and capital suppliers are the real estate industry’s other clients. Returns are generally anticipated to rise for operators who are operating at scale and making the appropriate investments.
Ankit Kapoor: In the future, the real estate sector will appear very different. Those who use the most technology or have the most impressive demonstrations won’t be the victors. It will be the businesses that work hard in the background to solve problems before they need to be escalated.