Warren Buffet’s “sidekick”, Charlie Munger said that he was all for Artificial Intelligence because there wasn’t enough of the real thing. An Israeli startup company, Skyline AI plans to use artificial intelligence to outperform traditional commercial real estate investment decisions in the US.  Skyline A.I. uses 130 different data sources to detect and exploit market anomalies, identify superior risk-reward investments and discover untapped value-add opportunities.

Founded in Tel Aviv in 2017, Skyline A.I made its first real estate transaction guided by artificial intelligence in June 2018, when it completed a $26 million transaction for two multifamily properties in Philadelphia, analysing the deal without human involvement.

“That was an important milestone for us,” said Skyline CEO Guy Zipori.  “We plan to do another six investments in the next 12 months and also enter into other asset classes.”

Capture Every Piece of Information that Impacts on Commercial Real Estate

Guy Zipori describes the rich sources of data at the centre of the Sklyline AI process, “We’re trying to get our hands on every piece of information that might affect real estate values—everything from crime and education and demographics to restaurants, treasury data and LIBOR and stock market data. We’re also focused on information about real estate itself - the properties, the debt, recent transactions and so on. Today, we have 130 different data sources.

We have started with multifamily properties. We’re currently monitoring all the multifamily assets in the U.S with more than 50 units. That’s about 400,000 different properties.  For each property we have about 10,000 different data points, going back 50 years, depending on the data point and the property.”

Produce a Full Underwriting Report Instantly

Skyline AI allows clients to enter an address and instantly receive a full underwriting report which includes information about the asset and all the insights and predictions that could be extracted out of the data. There is instant feedback on how much the asset is worth today and what will happen in the next few years.

The system alerts the user to a value-add opportunity on the asset. This could be in the form of income, expenses or what’s happening in the surrounding area. Skyline AI is building a business model for each asset automatically, so users will get a model with a full 15-year pro forma. This information would take a team of people weeks to put together. Users can query the system and ask specific questions based on an investment philosophy or a particular asset and get a full list of assets that meet those criteria. 

Exploiting the Weakness of the Outdated Technology in Real Estate

When Skyline AI started to invest in real estate, investors were amazed at how outdated technology was in real estate. As smaller real estate investors, Skyline AI saw the challenges of investing in commercial real estate and especially how people analyse potential deals. Skyline AI has seized the opportunity for new technologies in this space. New technologies can have a big impact on commercial real estate investment. It’s the largest industry that exists today. AI and machine learning already surround us, but it’s not yet prominent in commercial real estate.

Skyline AI is about empowering people - not replacing them. The entrepreneurs faced a question whether real estate investors already doing well would be positive about embracing new technology. Skyline AI were surprised at how open and understanding commercial real estate leaders were to the impact of artificial intelligence on the way people invest.

Skyline AI is expanding into Office, Retail and Industrial Globally, including Australia

Initially people would tell Skyline AI that artificial intelligence came at a bad time in the real estate cycle. In the last 10 years, it seems the main thing you should have done is simply buy real estate to make yield.

Iri Amirav, Co-Founder and CRO explains Skyline AI’s future plans. “Most of the investors understand and would agree that the next 10 years will probably look different. In more difficult times, you need an advantage and that’s what we’re trying to create. What we can do today wasn’t possible several years ago. People see the impact that new technology has on other industries, so they understand the potential of leveraging similar technologies in commercial real estate. Eventually you won’t be able to compete with machines.”

Iri Amirav discusses expansion, “One of our main goals with the recent funding round is to expand our offering from multi-family to other classes of real estate. This includes industrial, office and retail investment opportunities.”

“Our immediate expansion plans are focused on the United States as the biggest market. That said, in the last few months, especially after announcing our funding round with JLL and others, we have been approached by real estate investors, pension funds and other significant players in the industry from across the globe including the UK, Asia, and even an investor that own property in Australia. What this tells us is that the demand for technology that delivers a value-add in uncertain economic times is going to make an impact in the global commercial real estate market.”

Skyline AI is using artificial intelligence to continually improve predictions and insights. Its predictions and insights can only be as good as the machine’s ability to learn from the available data.