Increased efficiency and reduced costs.
That is what AI promises the commercial real estate industry. And it’s a tantalizing promise, but despite the big buzz around big tech, a recent report shows uptake of AI solutions in the commercial segment has been underwhelming.
Why?
According to a recent survey from the Building Owners and Managers Association of Canada (BOMA Canada), which shares insights from property managers, asset managers and technology/innovation consultants, the average CRE portfolio uses AI in only 23% of its buildings. That average, BOMA notes, is made up of a range of responses that varied from 0% of buildings all the way to 100%.
Authors of the survey suggest this low average percentage is due to the fact that “many buildings simply don’t have the infrastructure in place” to support AI implementation. 44% of respondents say “legacy” building systems that weren’t designed with AI in mind have hindered their ability to implement AI at scale. But on top of this “infrastructure conundrum,” another 52% say their hesitation is due to the high cost of implementing AI, paired with unknown returns. The majority, at 63%, say a major roadblock is lack of internal expertise in AI.
“The biggest barrier is a lack of understanding about what’s out there, how it works and what it can be implemented with,” says one respondent.
Those that are implementing the tech are largely putting it to use for energy management and optimization. In fact, 70% of respondents say they are using AI in this area. Some of the most widely-used tools include Building Management Systems (BMS), which use AI to control and monitor HVAC, lighting and energy systems; and smart meters, which track how much energy is used and when, and automatically share the data with utility companies.
The survey’s statistics on investment outlooks over the next two years capture the industry’s willingness to adopt AI in the near term. 46% said they plan to invest under $500,000, 32% have no investments planned, 14% plan to invest between $500,000 and $2 million, and 4% are betting big at $5 million or more.
“[O]rganizations are taking measured, experimental approaches rather than betting big on AI transformation,” reads the survey.
Despite the hesitancy or lack of ability among many commercial real estate companies to dive headfirst into the AI revolution, there are signs that the industry is poised for more widespread implementation.
According to Statistics Canada, AI adoption is on the rise in the real estate sector. Between Q2 2024 and Q2 2025, the share of real estate rental and leasing companies that planned to adopt AI software grew from 10.9% to 18.6%. Several large companies are leading this charge, including Vancouver-based QuadReal Property Group, which implemented an AI-powered Customer Relationship Management (CRM) and Virtual Leasing Agent from Funnel Leasing in 2023. According to an article from Deloitte, QuadReal saw a 33% improvement in tour-to-lease conversions, which resulted in decreased vacancy days and increased effective rent capture.
In another example, in 2023, retail giant Cadillac Fairview adopted an autonomous HVAC system internally called “HVAC AI” across 9.5 million sq. ft of office space at TD Centre, RBC Centre, Simcoe Place, Toronto Eaton Centre and Calgary City Centre. According to a press release from CF, HVAC AI has led to reduced carbon emissions, energy usage, and operational cost savings and has identified equipment health or occupant comfort issues on several occasions.
In the Deloitte article, an unnamed retail company’s gains from installing an autonomous HVAC system are also singled out. After rolling out the tech across more than 600 stores and 6.6 million sq. ft, they saved 7.98 million kWh in electricity, resulting in $1.38 million in savings and a valuation impact of $24.46 million.
For companies with smaller portfolios and less capital, AI overhauls and massive returns like these will take longer.
But optimism surrounding the autonomous tech persists.
According to BOMA Canada’s survey, 52% say AI will be incremental and will improve efficiency, but won’t transform the industry. Another 26% are more bullish, saying it will transform the industry, and only 7% say AI is “over-hyped” and won’t have any major impacts in CRE.
