AI Is Optimizing the Back Office, but What About the Physical Office?
Companies are missing out on significant savings by not applying AI to optimize their physical office spaces, even though real estate costs rank among the top three business expenses. AI tools can help reduce building operating expenses by optimizing office space, energy use, and lease strategies while supporting sustainability goals. With 34% of commercial leases expiring soon, using AI to analyze whether to renew or relocate is becoming increasingly important.
While AI has automated many repetitive tasks in the back office—helping teams quickly find and summarize information—its potential to optimize offices, factories, and facilities remains underutilized. Real estate costs include ongoing expenses like leases, utilities, maintenance, and repairs, which differ from capital expenditures related to building new facilities. AI can identify inefficiencies in these areas and help companies make smarter decisions.
Where AI Can Deliver Big Savings in Commercial Real Estate
- Optimize space as employees return to the office. AI can analyze work schedules, badge swipes, and sensor data to predict office occupancy and determine the right amount of space needed. This reduces the risk of overleasing or underutilizing space. For instance, a global financial institution saved over $120 million annually by aligning office use with actual demand. With many companies encouraging employees to return, occupancy patterns are shifting—63% of remote workers have returned full time, while about 80% work either fully in-office or hybrid.
- Predict energy use. Buildings generate vast amounts of data on electricity, plumbing, HVAC, and ventilation. AI can combine this with weather forecasts to optimize heating, cooling, and electricity use. For example, tools like JLL’s Hank use machine learning and real-time data to adjust HVAC systems, cutting energy costs by up to 40%. Since building operations account for 30% of global energy consumption and 26% of energy-related emissions, smarter energy management is key. AI can also integrate renewable energy sources and help meet regulatory and sustainability targets.
- Make better financial decisions, such as downsizing offices. AI can quickly evaluate whether to stay in a building or relocate, plan locations strategically, and simplify cash flow models. One company generated over $250 million through property sales and leasebacks, all guided by AI analytics. With a significant portion of leases expiring soon, these decisions will shape the future of commercial real estate portfolios.
AI’s role in optimizing physical spaces is essential for companies aiming to cut costs and meet sustainability goals. For real estate and construction professionals, understanding these AI applications can provide a competitive edge and unlock new efficiencies.
To explore practical AI applications and training opportunities relevant to real estate and facility management, visit Complete AI Training.
Your membership also unlocks:
