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Six Critical Questions Part 3: Will We See an Avalanche of Distressed Assets in 2024? 

Six Critical Questions Part 3: Will We See an Avalanche of Distressed Assets in 2024? 

Cushman & Wakefield, Featured Articles /

This article is part three of a six-part series focusing on the six most critical questions about development and commercial property in Southwest Florida.  Across the country, borrowers and lenders are bracing for a potential surge of distressed assets. According to a study by Cushman & Wakefield, the U.S. commercial property market exhibited an alarming $80 billion in outstanding distress as of Q3 2023. Even more concerning, the report showed more than $215 billion in potential distress on the horizon, surpassing the cumulative distress observed during the Great Recession.  However, Southwest Florida has been able to buck a number of national trends in commercial real estate over the last few years. This brings us to the third question in our series:  Will Southwest Florida See an Avalanche of Distressed Assets in 2024?  To understand the reasons why borrowers and lenders are concerned about distressed assets, it’s important to first understand how commercial loan interest rates contribute to distress levels.  Interest Rates and Distressed Assets  Commercial real estate loans are typically structured with short maturities, often in the neighborhood of eight to ten years, with a much longer amortization period. Consequently, property owners face a large balloon payment at the end of each loan.  If owners are unable to settle these balloon payments in full, they will refinance that balloon payment at current interest rates.   When the majority of existing commercial loans were established, historically low interest rates were in effect. Eight years ago, the average 10-year treasury yield was an astonishing 1.84 percent. Now, with rates more than double that, the cost of refinancing a commercial property balloon payment may not be worth the added cost of borrowing money. This is particularly true in markets where inventory is high and property values are declining.  Distressed Property in Southwest Florida  Here in Southwest Florida, we are experiencing some of the lowest levels of distressed commercial real estate in the state. Our area boasts a loan loss rate of only 11%, which falls below the state average of 12%. Southwest Florida’s resilience comes in part from our strong rental rates, which are helping to keep many properties profitable and net operating income (NOI) positive.  Will distress levels rise in Southwest Florida?  Most likely, although not to the potentially catastrophic levels we may see in other parts of the country. Maturing loans will exert pressure across all product types, especially middle and low-quality office assets. However, rent growth has lifted NOI considerably over the life of the average loan, meaning we shouldn’t anticipate an avalanche of distress. Southwest Florida borrowers who secured financing prior to 2019 have likely accumulated enough appreciation to make their property’s current values higher than their debt balance. Coupled with low vacancy rates, strong job growth, and favorable net migration, our region will likely outperform most of the rest of the country.      Are you a commercial property owner with a loan on the cusp of maturity? If so, the Commercial Property Experts  at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) can help you determine your best next move in our current economic climate. CPSWFL has the data, analytics, and local experience to help you understand the dynamics of our region’s economic potential and commercial property landscape. Complete our online contact form or call us at 239-489-3600 to speak with an expert.     

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Six Critical Questions Part 2: What Impact Will Interest Rates Have on Commercial Real Estate?

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This article is part two of a six-part series focusing on the most critical questions about development and commercial property in Southwest Florida.   The volume of commercial real estate transactions in Southwest Florida decelerated over the last year, likely attributable to number of factors. These variables include escalating construction costs, scarcity of land for development, increasing insurance premiums, and growing interest rates.   Yet, despite this slowdown in commercial sales velocity, prices are still on the rise.  This brings us to the second critical question in our six-part series:  What Impact will Interest Rates Have on Southwest Florida Commercial Real Estate?  Undoubtedly, interest rates have a visible influence on the commercial real estate investment market. Elevated interest rates mean a hike in the cost of borrowing money and can ultimately dampen demand from developers and investors.  Interest Rates and Treasury Yields  Commercial mortgage rates are typically based on the 10-year treasury. Treasury yields peaked at 4.92 percent in October 2023 and currently hover at about 4.3 percent, roughly 80 basis points higher than we saw last April. Such rates can pose hurdles for properties that can’t generate enough cash flow to support high-leverage mortgages. Fortunately, rent growth should soften the impact of pricier borrowing costs on balance sheets.  The Federal Reserve Bank escalated interest rates 11 times in 2022 and 2023 to counteract skyrocketing inflation. Since inflation began to stabilize in mid-2023, the Fed has left rates unchanged in six of its last seven sessions. Currently, the U.S. inflation rate stands at 3.2 percent, and although the Fed disappointed many by announcing that it’s unlikely to reduce interest rates in the immediate future, experts still anticipate at least one rate cut before the end of the year.   More Interest Rate Stability Coming  We anticipate much more stability in interest rates from this point forward. As a result, property values in our region are poised for marginal growth, thanks to low inventory and high rent potential. However, we shouldn’t expect to see sales volume rebound to previous levels for another year to 18 months.    Are you prepared to take advantage once interest rates begin to fall? Whether you’re a property owner looking to position your asset for sale or a potential buyer seeking opportunities in our marketplace, the Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) have the data, analytics, and local experience to assist you with your needs. Complete our online contact form or call CPSWFL at 239-489-3600 today to speak with one of our experts.   

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Six Critical Questions Part 1: Is Southwest Florida Headed for a “ Doom Loop?

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The Urban Land Institute’s inaugural Southwest Florida Focus Real Estate Forum recently shone a spotlight on responsible land use and sustainable community development in our region. I was honored to be a featured speaker at this event, which brought together industry leaders, professionals and stakeholders to discuss development trends in Southwest Florida. This article is part one of a six-part series discussing some of the most important points from that presentation, which focused on the six most critical questions about development and commercial property in Southwest Florida for the remainder of 2024 and beyond. As property values, interest rates, and inflation have all spiked over the past few years, skeptics have worried about a seemingly inevitable downturn like the one we experienced during the Great Recession. This brings us to our first critical question: Is Southwest Florida headed for a “doom loop?” The term “doom loop” might be new to some, but its implications are clear: it describes a cycle of events that spirals downward into an economic slump. While some national economic indicators may offer reason for concern on the surface, the prospect of a doom loop is not likely on the horizon for our region because of our regional strengths. Regional Economic Indicators Southwest Florida continues to show robust job growth with the addition of more than 11,000 jobs in 2023, keeping our unemployment rate below the national trend. In Lee County alone, there has been a four percent surge in new businesses, and projections show every sector growing by one to three percent annually over the next five years. Tourist tax revenues are climbing as well, thanks to our successful and ongoing rebound from Hurricane Ian. As consumer confidence improves, residents appear willing to increase their spending levels, with consumer sentiment numbers also on the rise from 2023. Regional Commercial Development Trends Although other parts of the country are plagued with commercial vacancies, Southwest Florida’s rapid residential and business growth have kept vacancy numbers very low. Nationally, nearly one in five (19.7%) offices sit vacant, but our region’s office vacancy rate stands at a paltry 4.1 percent. Local industrial and retail vacancy rates are also well below the national level. Although FGCU’s Southwest Florida Real Estate Report indicates that commercial property sales may have plateaued, our limited supply and robust demand suggest that the cost of renting commercial space will likely continue to grow in Southwest Florida. This differs greatly from what our region experienced in the early 2000s. At that time, speculative investments overwhelmed the real estate and construction markets, producing excess inventory and paving the way for economic collapse. Southwest Florida’s Resiliency Although our region has certainly faced challenges over the past two years, current economic indicators show that Southwest Florida should continue to be resilient, even as other parts of the country may begin faltering. However, economic cycles are natural and what goes up must inevitably go down. When our region does eventually face a downturn, we anticipate a soft landing, not a recession, in Southwest Florida. Do you have questions about Southwest Florida, its economy, or our commercial development landscape? Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) has the data, analytics, and local experience to help you understand the dynamics of our region’s economic potential.  If you’re a business owner, developer, or investor looking for an opportunity in our current market, reach out to the Commercial Property Experts at CPSWFL are ready to answer your questions. Complete our online contact form or call us at 239-489-3600 to speak with an expert.  

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Gary Tasman and Junior Achievement of Southwest Florida’s JA Inspire Event

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We are excited to feature a special video with Gary Tasman, CEO and principal broker of Cushman & Wakefield | Commercial Property Southwest Florida a proud board member of Junior Achievement of Southwest Florida. This video highlights the remarkable JA Inspire event, a transformative career expo designed to showcase the potential career paths for students in Collier and Lee Counties. Through JA Inspire, local students engage directly with employers, learn about the qualifications needed for Southwest Florida’s booming industries, and discover how to gain the experience required for future employment. This event is crucial in building a well-trained workforce to support our region’s growth. Watch the video to see how Gary Tasman and JA Inspire are making a real difference in the lives of our young people. Learn more about how you can contribute to this vital initiative here.  

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Double Impact: CPSWFL Wins Consecutive CoStar Awards for Southwest Florida’s Economic Expansion with Lansing Building Products

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The headlines in early 2024 were eye-opening for many: “Southwest Florida Braces for Population Surge as Lee County Nears One Million Residents.” This forecast stemmed from a January report by the University of Florida’s Bureau of Economic and Business Research (BEBR). The data projected that Lee, Collier, and Charlotte counties would witness some of Florida’s most significant population increases through the end of the decade. The BEBR’s most optimistic projections suggest a combined population of more than 1.7 million by 2030, marking a 23.6% increase. The ripple effect of this rapid expansion is evident. As we’ve seen, population surges fuel economic progress through a domino effect. Newcomers necessitate the construction of new homes, roads and other infrastructure, schools, medical facilities, grocery stores, and so forth. The ensuing construction boom then drives job creation and ultimately attracts even more residents to our region. Southwest Florida’s prospects for business development and prosperity have captured attention far beyond our local media reports. Over the last several years, the area has attracted many new businesses while also encouraging existing enterprises to expand their presence. One such company is Lansing Building Products, a construction wholesaler with a network of 113 locations in 35 states. Last year, Lansing signed a 66,017 square-foot lease, brokered by Gary Tasman and Shawn Stoneburner of Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL). Lansing’s presence is a further reflection of our community’s economic expansion, and will be crucial for driving future regional growth. Lansing provides exterior building products, including windows, doors, roofing and insulation to professional contractors. Material procurement is often a hurdle for builders who strive to keep projects on track, especially when demand is high. Lansing will serve as a dependable source to ensure local construction projects proceed without unnecessary delays to satisfy the needs of our surging population. Lansing pinpointed Southwest Florida as a market with thriving demand for residential construction, making our area optimal for their expansion. CPSWFL helped facilitate their plans through the brokerage’s deep understanding of the local market.  Initially, Lansing was poised to lease a modest space that would have been adequate to meet their initial needs. However, Lansing revised their strategy and sought out larger accommodations after analyzing local market data with CPSWFL.  “We showed them the market analytics, the growth trajectory of Southwest Florida, and all of the projects and construction currently in planning,” explains Gary Tasman, CPSWFL’s CEO and principal broker. “We helped them better understand Southwest Florida and identify where they needed to be.” That location turned out to be a strategically positioned warehouse facility in the Suncoast Commerce Center. The location, in close proximity to I-75 near Luckett Road, will enhance Lansing with getting their products into the market and then onto construction sites.  “Our partnership with Lansing is pivotal because of what they represent to Southwest Florida. They are essential for our continued development and ongoing recovery from Hurricane Ian,” says Tasman. “By supporting Lansing, we’re also helping to address our community’s needs, and promote expansion and economic vitality throughout the region.” Because of the Lansing transaction’s potential impact on Southwest Florida’s growth and prosperity, CPSWFL was recently awarded the CoStar Impact Award for Lease of the Year in the Southwest Florida market. This marks CPSWFL’s second consecutive year receiving this prestigious award, which honors the most influential commercial real estate transactions and projects across 128 major markets in the United States, Canada, and the United Kingdom.  With nearly 200 commercial sales, leases, and consulting assignments closed annually, CPSWFL takes pride in its role in shaping the regional landscape by recognizing and tackling community challenges. The team’s mission is to not only practice real estate with efficiency and precision but also to leave our community a better place. CPSWFL’s partnership with Lansing is a testament to this commitment. Cushman & Wakefield | Commercial Property Southwest Florida is invested in the growth of our region. If you are an investor, developer, or business owner with interest in the booming Southwest Florida market, the Commercial Property Experts at CPSWFL have the knowledge and experience to help guide you on your journey. Contact our team of Commercial Property Experts by calling 239-489-3600, or contact CEO/Principal Broker Gary Tasman at gtasman@cpswfl.com

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Cushman & Wakefield|Commercial Property Southwest Florida Unveils Cutting-Edge Website Redesign

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Cushman & Wakefield | Commercial Property Southwest Florida, a leader in strategic commercial real estate solutions, proudly announces the launch of its newly redesigned website.  The new website is poised to enhance user experience and accessibility for clients, partners, and industry professionals worldwide. The revamped website features a sleek and modern design, offering visitors an immersive and intuitive browsing experience. With improved navigation and functionality, users can easily explore the full spectrum of Cushman & Wakefield | Commercial Property Southwest Florida’s services, insights, and property listings. Key highlights of the new website include: Streamlined Navigation: Optimized menus and navigation tools allow for seamless exploration of services, markets, and resources. Enhanced Search Capabilities: Robust search functionality enables users to quickly find relevant properties, market reports, and industry insights. Responsive Design: The website is optimized for desktop, tablet, and mobile devices, ensuring a consistent and engaging experience across all platforms. Interactive Features: Engaging multimedia content, including videos, infographics, and virtual property tours, provides visitors with dynamic insights into real estate trends and opportunities. Localized Content: Tailored regional content and market insights cater to the diverse needs of clients and investors across different geographic locations. “We are ecstatic to unveil our redesigned website, which reflects our commitment to innovation and excellence in serving the evolving needs of our clients and partners,” said Gary Tasman, CEO & Principal broker at Cushman & Wakefield| Commercial Property Southwest Florida. “This enhanced digital platform will empower users with greater access to our comprehensive suite of real estate services and market intelligence, enabling informed decision-making and driving success in today’s dynamic market environment.” Now that you’re on our new website we hope you’ll enjoy exploring the latest offerings and insights from one of the world’s leading real estate services firms.

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On Location with Gary Tasman: Ep. 8 – Sunseeker Resort and the Punta Gorda Airport

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On Location with Gary Tasman Ep. 8: Sunseeker Resort and the Punta Gorda Airport In this episode of On Location, Principal Broker and CEO Gary Tasman is at the Charlotte Harbor talking about exciting developments in Charlotte County. Tune in as he explains how the Sunseeker resort, updates to the airport and the creation of the Charlotte Airport Park are going to make the north end of Southwest Florida a vacation destination location. Are you in the market to buy, sell, or lease commercial real estate? Contact us by calling 239-489-3600 or use the form below.

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Craft Brewing Revolutionizes Commercial Real Estate

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Craft Brewing Revolutionizes Commercial Real Estate By Gary Tasman CEO & Principal Broker, Cushman & Wakefield Commercial Property Southwest Florida, LLC Anyone who has taken up the art of market watching over the last ten years may have noticed that breweries, micro-breweries and brewpubs have more than tripled the craft brewing market and placed most U.S. living quarters within 10 miles of a craft brewer. With Millennials accounting for 41% of the weekly beer-drinking population, the industry will continue to affect local and national real estate, as well as the economy. Craft Brewing Reclaims Obsolete Space Many brewing facilities are currently operating out of abandoned mills and vacant manufacturing spaces, as well as in redeveloped, archaic brew shops — in other words, reclaimed space, such as Millennial Brewing Company and Scotty’s Bierwerks’. Additionally, the craft brew space in Southwest Florida is split by retail and industrial space, with much of the retail space for breweries located in retail strip centers, such as Bury Me Brewing Company, Bone Hook Brewing Company, Old Soul Brewing and Point Ybel Brewing Company. Nearly 75% of tracked U.S. brewpub deals have also become a part of retail or commercial space, while microbreweries and regional craft brewing operations have mostly been tenants of industrial space. This translates to over 55.6 million square feet of occupancy growth across industrial (81.4%) and retail (18.6%) space as of 2007. A Growing Trend Within the State of Florida, there were a total of 195 breweries by the end of 2016, which suggests a 333.3% change in brewery growth since 2011 and translates to 1.3 breweries per capita. Over 1,200 barrels of craft beer per year are produced statewide, translating to 2.5 gallons per 21-plus adult. Ironically, five-plus years ago represented a time of zero breweries in Southwest Florida. But right now, there are 14 from Punta Gorda to Marco Island. Here is a look at local market indicators: Retail Vacancy Rate: 4.7% Industrial Vacancy Rate: 1.8% Office Vacancy Rate: 6.1% Population: 1.2 million Will this Trend Decline? The double-digit growth of individual markets may decline in 12 to 18 months, resulting in the closing of some breweries, largely in the markets where the trend has already proven to be strongest, because that is where the fiercest competition lies. Even so, small brewpubs, microbrewery operators and larger, regional players are continuing to multiply, especially as they expand to tasting rooms, full pubs and/or restaurants, as well as wedding and event venues. Additionally, more startups, private-equity funds and big beer conglomerates are looking to get a piece of the craft beer market. Tap House As aggregate craft beer production increases, these producers will be looking for outlets to expand their markets. Along with the potential to wholesale direct to local restaurants and bars, we see a new concept emerging. Tap houses that feature multiple products will be another potential outlet. One such concept, slated to open in early 2018, is Marlins Brew House. Here, patrons can choose from a rotating 32-tap inventory of local craft beers. Watch for Marlins Brew House and likeminded tap houses to expand rapidly throughout the region and beyond. How Do the Strong Survive? Prospective brewers should enter the craft beer market with a solid concept in place to ensure proper capital and space. This includes an executed lease before receiving approval for alcohol sales, because landlords will not take a chance on tying up a property without confidence in a business plan. Operators should also understand how local regulations may impact their business plan and have the necessary clauses written into their lease. Additionally, to connect with the Millennial consumer base, material goods should never take priority over experiences. The real estate and the design matters much more than how many taps one owns. Start by picking the right location. Just watch out for plug-and-play leases in otherwise nondescript second generation retail space. Then, invest in innovative design and architecture to stand out from the competition. This should include open spaces for live music, film screenings and/or backyard-style games for a family-friendly environment. And remember to seek partnerships with restaurateurs including food truck operators. This will allow brewers to focus on their craft, while potentially keeping customers in their space longer, driving beer sales up.

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Your Commercial Lease Clauses and COVID-19

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By Gary Tasman The COVID-19 pandemic has forced us all to re-evaluate the ways we conduct business, including remote work opportunities, surface sanitization, social distancing, human resources policies and indoor air quality. For those in the commercial leasing business, the concept of force majeure and how it applies to the pandemic is also being evaluated. Current litigation related to the pandemic could have major implications on the way commercial force majeure lease clauses are interpreted for both owners and tenants. What is Force Majeure? Force majeure is a clause frequently found in commercial leasing contracts. Loosely defined, force majeure is an unanticipated occurence that cannot be controlled. These types of events may include acts of God, governmental restrictions, material shortages, labor strikes, or even war or insurrection. In a contract, a force majeure clause typically offers one of the parties temporary reprieve from its contractual obligations if one of these events severely impacts their business. Here in Florida, our minds naturally turn towards hurricanes when we hear the phrase “act of God,” but many other circumstances can create challenging times for tenants and property owners. Certainly, the COVID-19 pandemic has created unique challenges for many tenants. The pandemic made it difficult for businesses to operate normally, and in many cases, government restrictions forced nonessential businesses to shut down entirely for prolonged periods. Many businesses have turned to the force majeure clause seeking relief from rent or other obligations during these unprecedented times. Does COVID-19 Qualify as Force Majeure? If force majeure can be defined as an unanticipated and uncontrollable event, then COVID-19 meets the broad classification of force majeure. However, the true definition of force majeure differs from contract to contract, and the specific terms of a lease agreement will dictate not only qualifying events but also the contractual obligations that may be excused. In other words, each leasing contract’s force majeure clause is unique in what it covers. Cases involving force majeure are currently working their way through the legal system, not only in Florida and the US, but around the world. Florida courts typically adhere to very strict interpretations of contracts. While you or I might consider a pandemic to be an act of God, courts will likely want to see epidemics or pandemics specifically listed in the contract as a force majeure event to trigger the clause. Some tenants may turn to force majeure in hopes of deferring or even ceasing rent payments. However, commercial lease contracts rarely excuse payments or offer abatement as part of a force majeure clause. On the other hand, landlords may look to the clause to excuse themselves from paying for tenant improvements. Again, the actual terms of the lease will dictate the obligations that may be excused under force majeure. Implications for Commercial Leasing In many ways, force majeure clauses have been something of an afterthought in contracts until today. While it may be difficult to enumerate “unanticipated” events in advance, the pandemic has taught us that force majeure events should not be treated as boilerplate material. Instead, they should be thoughtfully considered when writing commercial lease agreements. Both property owners and tenants should actively place more scrutiny on this clause and negotiate force majeure events and the scope of relief offered. Ideally, a force majeure clause will allow both parties relief of an acceptable level of risk during an unanticipated and uncontrollable event. If commercial leasing or tenant issues are a concern for you, reach out to the professionals at Cushman & Wakefield | Commercial Property Southwest Florida. Our full-service property management team has the knowledge and experience to keep your commercial property running efficiently and profitably. To learn more, call us at 239-489-3600 or contact-us.

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How is AI Changing Commercial Real Estate?

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If you’re like most people, you have mixed feelings about the recent rise of artificial intelligence technology. Our curiosity about AI is tempered by confusion and anxiety about its future implications. According to a recent Ipsos survey, only 36% of Americans are excited about the potential benefits of artificial intelligence, a number significantly lower than the global average of 54%. At the same time, 63% of us are nervous about what AI holds for us. Although they may not label it as artificial intelligence, businesses have used AI for years to streamline operations. Algorithms for Inventory management and transportation logistics have improved the efficiency of product movement. Machine learning can detect fraudulent activity in the banking and financial sectors in a fraction of a second. Factories also use AI to predict when machines are likely to need service and schedule maintenance accordingly. AI has the potential to optimize and streamline nearly every industry, including commercial real estate. True, no machine can take the personal relationships we develop with our clients at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL). However, there are three key areas where AI can enhance our efficiency, accuracy, and value to our clients: real estate investing, property valuation, and property and facilities management. AI and Real Estate Investing The decision to add a property to your investment portfolio should never be taken lightly, and artificial intelligence can serve as a valuable resource in the process. Just as financial planners use AI as an investment selection tool, commercial property investors and their advisors can leverage AI’s informed decision-making capabilities to develop their property portfolios while simultaneously minimizing potential risks.  Thanks to their ability to swiftly process large amounts of data quickly, AI algorithms can readily identify economic patterns and trends faster than humans. This enables underwriters and lenders to predict potential return on investment and other factors when evaluating a deal. While forecasting the future will never be truly fool-proof, predictive analytics can clearly provide invaluable guidance on investment timing, rent growth potential, property appreciation, and other market trends. When combined with our team’s in-depth knowledge of our local market, AI can enable us to assist our clients in making even more informed decisions about property acquisition and development, ultimately leading to a stronger portfolio. Cushman & Wakefield has been at the forefront of this shift, using a proprietary AI tool called Portfolio+. This tool optimizes commercial property collections for clients by producing strategic guidance and roadmaps for portfolio optimization. For one government client, Portfolio+ was able to identify potential savings of 15% annually using artificial intelligence. AI and Property Valuation If you’ve ever been curious about the potential resale value of your home, chances are you’ve entered your address into Zillow.com, one of the first real estate websites to harness the power of artificial intelligence. More than 15 years ago, they introduced Zestimates, which uses an algorithm to estimate home values. While Zillow has had its struggles (more on that later), it was a pioneer in applying AI to the real estate industry. In commercial real estate, there are various factors that help determine property value. These include comparable properties, market conditions like supply and demand, the location and condition of the property, capitalization rates, market rents, and replacement costs. Calculating all these variables can be complex, time-consuming, and imprecise. But just as calculators simplified the process of computing complex mathematical formulas in the 1970s, AI can enhance efficiency by reducing the time spent on data entry and manual analysis.   Relying solely on an algorithm for decision-making can be risky, however, as Zillow learned in 2021. In February of that year, the company launched Zillow Instant Offers, where homeowners in specific markets could receive instant cash offers based on Zestimates. The new business line lasted only eight months, and Zillow took a $304 million inventory write-down, stating that it had purchased homes for more than the company believed it could recoup through resale. This setback not only caused Zillow’s stock to take a nosedive but the company was forced to cut about a quarter of its workforce. The human touch is still necessary, as Zillow learned the hard way. However, the company hasn’t abandoned artificial intelligence in its strategy. This year, it introduced a conversation plugin for ChatGPT to help buyers find properties with the help of a virtual assistant, and the company recently began rolling out AI-powered virtual home tours in select markets. AI and Property and Facilities Management As the leading third-party commercial property management company in Southwest Florida, our team at CPSWFL clearly understands the unique challenges of leasing management and facilities maintenance. Harnessing the power of artificial intelligence tools can greatly benefit both areas. For lease managers, AI tools offer an array of benefits, including efficient task automation for some of the more tedious administrative tasks, such as document management and rent collection duties. Furthermore, recent AI advancements in natural language processing are helping property managers deliver prompt updates and answer tenant queries efficiently. These streamlined processes can allow our property management team to allocate more time toward crucial tasks that require more personal attention. Facilities managers can also leverage AI as a valuable resource. Predictive maintenance algorithms can help schedule maintenance activities, preventing costly breakdowns and repairs. When smart buildings equipped with internet-based management systems for heating, cooling, and lighting integrate with machine learning, they become more comfortable and energy efficient, ultimately ensuring tenant satisfaction and cost-effectiveness. Because the sensors in smart buildings can be monitored and managed remotely, facilities management teams can promptly address any concerns or anomalies that may be red flags. Smart systems can even function as security systems, providing property managers and public safety with timely alerts regarding potential concerns. The AI Revolution is Here Not so long ago, artificial intelligence was a concept confined to science fiction, seemingly generations in the future. Like it, love it, or fear it, the AI genie is out of the bottle. We interact with virtual assistants like Siri or

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