Headcount Reduction Is the Wrong ROI Story for AI in CRE

Using AI in CRE with the goal of headcount reduction is shortsighted. Its real benefits lie in freeing employees to do more meaningful work.

When the conversation turns to AI business software, reduced headcount is sure to come up. Given its impact on layoffs over the last couple of years, that’s understandable. What doesn’t seem to be getting as much attention yet is the regret many companies once quick to initiate AI-related layoffs have expressed or the costs many have faced in undoing those hasty moves.

And according to Dai Williams, president of commercial real estate property management AI platform Re-Leased, the problems with that limited focus can be even more pronounced in commercial real estate because of its high-touch nature. “Headcount focus underplays the value of relationships, the value people bring, their expertise,” he says.

In a field where human experience, judgment, and relationship building are crucial for success, the people doing the work can’t be replaced by software. But if the software isn’t about replacing employees with a program that costs less than they do, then what is it accomplishing, and how exactly are companies benefiting?

The Capacity AI Creates

Amid all the thoughtful work CRE professionals do, there’s still a great deal that just feels like busywork. These tasks are important and must be completed correctly, but they don’t require the creativity, judgment, or ability to build trust that CRE firms so greatly value in their employees. These functions can include data entry, extraction, verification, chasing down tenants and suppliers for required documentation and data, and routine coordination and first-pass analysis.

“It’s not about cost reduction,” Williams explains. “It’s about freeing capacity.”

That capacity AI creates for a CRE team by taking on these repetitive, labor-intensive tasks can then be used to create two distinct advantages.

The Operational Advantage

Teams can work more quickly and consistently. They can absorb natural attrition more gradually and focus on strengthening margins, controls, and the service they offer without immediately adding supporting roles. The time once spent on tasks like extracting invoices and leases and populating property management systems and financial systems hundreds of times a day can be used in more productive ways.

“Employees get to spend more time building relationships with tenants and owners, more time understanding the market,” Williams says.

The Growth Advantage

Firms using AI can direct their experienced people toward new properties, new mandates, and business development. The company’s portfolio can expand without increasing headcount at the same rate. When a team is no longer buried in email or the drudgery of hours of copying, pasting, and then triple checking all of that, it’s incredible what they can build.

In both cases, the value comes not from having fewer people on board but from breaking the link between portfolio growth and administrative cost. AI gives property businesses room to make their own decisions about where people add the most value and what they can accomplish, rather than allowing repetitive work to determine the size, shape, and goals of the team.

Where Human Oversight Will Remain Critical

AI can take on the work of finding, extracting, checking, and organizing information, and it does all those things extremely well. But Williams insists that accountability must always belong with people. Decisions that affect a firm’s tenants or owners, as well as decisions involving risk and asset performance, will never stop requiring context, judgment, and a clear understanding of commercial consequences. People also need to oversee any work AI undertakes and ensure quality and accuracy.

AI’s role here is to give experienced professionals better information to work with sooner and to remove the manual work around the decision, not to make responsibility disappear. That’s a big distinction because the best operating model is not the one that removes people from the process; it’s the one that lets them spend less time chasing and assembling facts and more time applying judgment, managing relationships, and directing the action.

Williams says the headcount reduction focus misses what makes a CRE firm special and unique. The creativity, experience, and ability of its people to build trust will always be what makes a great firm stand apart. And the right AI software, combined with the right focus on the goals behind using it, lets those people spend more time doing all those things they do best.

“Be creative, build, personal fulfillment: AI frees you up for that,” Williams says.

Taking Back Your Team’s Most Valuable Resource

And just what kind of time are CRE companies looking at saving with AI? Let’s start with the hour or so it takes a property manager to abstract a new lease. Williams explains that Re-Leased performs the data extraction and verification and populates the hundreds of fields required in three to five minutes at most.

Compound that across thousands of leases, and you’re taking back a huge chunk of time with that one function alone.

The benefits CRE companies using this technology experience over time include improvements in metrics like weighted average lease time and occupancy rates as well as some important internal advantages.

“These companies are seeing that staff are more engaged,” Williams says. “And staff that are more engaged are sticking around longer. They’re more impactful.”

It’s long been said that real estate is so valuable because they aren’t making any more of it, and the same is certainly true for time as well.