We sat down with Stephanie Barr, a Director of ESG and member of the Firm’s AI Committee, to explore key issues like AI, ESG, and proptech. Read on for insights on these topics and more.

Q. As Director of ESG, how do you see AI, sustainability initiatives, and proptech intersecting to advance ESG goals in real estate? Can you provide examples where these innovations have significantly enhanced ESG outcomes or addressed sustainability challenges? 

The intersection of AI, sustainability initiatives, and proptech is being utilized to quantify the financial impact of ESG goals and identify new areas of opportunity or risk. 

By being able to capture real-time impact, for example, demonstrated through increased rent, higher tenure, faster lease-up, and higher occupancy, we can measure the value created from these initiatives. We utilize proptech to identify opportunities for impact as well as to capture savings. Machine learning and AI tools are used to determine which aspects of ESG create the biggest impact by asset class and geography.

In the realm of investment diligence, we see AI taking a greater role in identifying market-level risks and opportunities, assessing likely interventions or adjustments to the business plan, and forming an unbiased opinion on the investment. This is especially exciting for the domain of ESG-related risks as these indicators are shifting rapidly.

Q. ESG considerations are increasingly shaping investor priorities and regulatory frameworks. What are the key ESG factors influencing LPs' decisions in real estate investments today? How can these factors be leveraged to drive both sustainability and financial performance?

Sustainability and financial performance are not diametrically opposed. In fact, we believe the sole reason to implement ESG initiatives is to create higher-performing and more attractive products. Ideally, we want to balance risk, return, and impact.  This is possible by identifying which elements within the ESG space address all three.

Q. Given the evolving regulatory landscape and investor expectations around sustainability, how will AI and proptech enhance ESG transparency and performance measurement within the real estate sector? Could you share insights on successful implementations or emerging trends in this area?

Ideally, these tools will allow more efficiency and transparency around responding to investor due diligence questions by being able to pull key information automatically and framing it to meet the specific investor need or disclosure format. Large language models and AI assistants, such as ChatGPT, can help in creating the narrative and proptech can make the data easier to collect and report.

Q. Why Speak at iGlobal Forum? What unique insights and experiences will you be sharing at iGlobal Forum's event on September 25th in LA, and what makes this event significant for you? 

We have spent several years working on quantifying the financial impact of ESG initiatives within our portfolio. Last year we captured the value that has been created from our utility efficiency enhancement projects since 2014. We are now completing a project in which we can score the value of our social activities. We believe this work is unique and by sharing we continue to exemplify our belief that the only way we win in ESG is through collaboration, not completion. 

Stephanie will join us at the 26th Real Estate Private Equity Summit in LA on September 25th, for a panel discussion on “Future-Proofing Real Estate: Leveraging AI, Sustainability, and Proptech.” This panel will explore the potential of AI, sustainability, and proptech to future-proof real estate investments, and will look at how these innovations drive transformative change in decision-making, tenant experiences, and global investment while steering the industry towards net-zero emissions by 2030. Attendees will gain insights on regulatory shifts, investor priorities, and strategies to seize emerging opportunities. Stephanie will be joined by fellow panelists: Matt Kaczmarek (BlackRock), Phoebe Van Tran (Impact Global Capital Partners), Melissa Gutierrez-Sullivan (CIM Group, USGBC California and Green Network), and Rachel Davis (Petros PACE Finance).