A Bird’s Eye View
Monthly Newsletter

AI, Automation, and the Human Advantage in CRE Finance
June 2025
Key Highlights
AI has fundamentally reshaped how lenders approach underwriting, forcing owners to think more strategically when presenting a project to capital providers.
There are meaningful limits to how far technology can support decision making in capital markets, and an overreliance on these tools creates unique risks.
The human element remains at the core of commercial real estate financing; storytelling and negotiation are still essential skills for owners and capital advisors.
Since the initial launch of ChatGPT in late-2022, AI and related automation technologies have become prevalent in the commercial real estate lending industry. The rise of AI has coincided with an increasingly complex capital markets environment, and emerging technology is delivering meaningful advantages to those who are able to harness it.
However, it is important for operators to understand that AI has not replaced the human element. Trust, experience, and relationships are still the core tenets that drive capital execution. In today’s environment, success belongs to those who understand how to blend digital tools with human interaction to drive successful decision making and relationship building.
However, it is important for operators to understand that AI has not replaced the human element. Trust, experience, and relationships are still the core tenets that drive capital execution. In today’s environment, success belongs to those who understand how to blend digital tools with human interaction to drive successful decision making and relationship building.
How AI is Shaping the CRE Lending Landscape
In a short period of time, AI has fundamentally reshaped the way lenders approach underwriting, risk assessment, and borrower engagement. The time to evaluate a loan package has decreased dramatically for lenders leveraging AI. Given the enhanced computational power, it is also possible for lenders to perform more intricate stress testing and downside risk assessments. Specifically, AI-powered underwriting tools are helping lenders identify potential risks and opportunities based on historical data.
In addition, machine learning is also playing a significant role by enhancing the ability of capital providers to analyze large datasets and extract real-time insights on important market trends such as leasing, rent growth, and regional economic shifts with far greater efficiency. Across the industry, lenders of all types have placed an emphasis on procuring data and applying the analytical tools necessary to extract insights that inform the credit decision-making processes.
On the client-side, AI gives capital providers the ability to manage relationships with a wider range of prospective borrowers. Automation features have become standard in most customer relationship management systems, and this has led to improved deal tracking. Lenders and capital advisors can monitor pipeline activity, log borrower interactions, and identify the need for strategic follow-ups more efficiently. Collectively, these tools have allowed capital providers to offer an elevated level of support to borrowers, which is especially beneficial when market conditions are more challenging.
In addition, machine learning is also playing a significant role by enhancing the ability of capital providers to analyze large datasets and extract real-time insights on important market trends such as leasing, rent growth, and regional economic shifts with far greater efficiency. Across the industry, lenders of all types have placed an emphasis on procuring data and applying the analytical tools necessary to extract insights that inform the credit decision-making processes.
On the client-side, AI gives capital providers the ability to manage relationships with a wider range of prospective borrowers. Automation features have become standard in most customer relationship management systems, and this has led to improved deal tracking. Lenders and capital advisors can monitor pipeline activity, log borrower interactions, and identify the need for strategic follow-ups more efficiently. Collectively, these tools have allowed capital providers to offer an elevated level of support to borrowers, which is especially beneficial when market conditions are more challenging.
The Risk of Over-Reliance on Automation
Although AI and automation offer clear advantages, their application in capital markets is constrained by significant limitations. Loan scenarios that fall outside standard models such as complex recapitalizations, distressed assets, or transitional properties often require human involvement from the outset. Algorithms may flag risks, but technology cannot fully understand the nuance of a business plan or assess the reputation, credibility, or real-world experience of a sponsor.
Given these limitations, an overreliance on automation introduces risks associated with intangible details and specialized knowledge. Local dynamics, like submarket rent anomalies or property-level operational issues, are best handled by a human reviewer. Data pertaining to these factors is typically not captured in the large-scale databases that feed into automation tools, but this information can significantly alter the viability of a loan package. A related risk revolves around the notion that technology relies on a predefined set of inputs, and this can lead to cookie-cutter outputs that do not consider the borrower’s unique situation or business objectives.
At the relationship level, capital providers have increasingly leaned on automation to build and strengthen relationships. This has led to a growing frustration among owners and prospective borrowers because, at the end of the day, human interaction is the key trust-building activity. In the commercial real estate industry, capital providers on the debt and equity sides ultimately fund deals based on a combination of quantitative and qualitative analysis. Capital providers need to have a high degree of confidence in the people behind the project prior to funding, and technology simply cannot stand in as a substitute for genuine interaction.
Given these limitations, an overreliance on automation introduces risks associated with intangible details and specialized knowledge. Local dynamics, like submarket rent anomalies or property-level operational issues, are best handled by a human reviewer. Data pertaining to these factors is typically not captured in the large-scale databases that feed into automation tools, but this information can significantly alter the viability of a loan package. A related risk revolves around the notion that technology relies on a predefined set of inputs, and this can lead to cookie-cutter outputs that do not consider the borrower’s unique situation or business objectives.
At the relationship level, capital providers have increasingly leaned on automation to build and strengthen relationships. This has led to a growing frustration among owners and prospective borrowers because, at the end of the day, human interaction is the key trust-building activity. In the commercial real estate industry, capital providers on the debt and equity sides ultimately fund deals based on a combination of quantitative and qualitative analysis. Capital providers need to have a high degree of confidence in the people behind the project prior to funding, and technology simply cannot stand in as a substitute for genuine interaction.
The Irreplaceable Human Advantage
While technology has improved efficiency, it has not displaced the essential role people play in driving superior outcomes. Experience, judgment, and domain knowledge are still at the center of every successful transaction. Trust-based relationships are often the key to securing tailored capital solutions, and these relationships are born from the confidence, credibility, and alignment established between borrower and capital provider over a period of time.
In an industry being reshaped by innovation, storytelling and negotiation still define successful capital execution. Presenting financials is important, however weaving them into a compelling narrative aligned with a strategic business plan is what moves deals forward. Seasoned advisors draw on years of experience to position an application for a successful outcome.
As experienced commercial real estate operators know, every financing situation is unique, and some can be quite complex. Navigating potential issues and anticipating lenders’ questions has become more difficult given the analytical technologies available to underwriting teams. Ironically, the AI technology embraced by lenders has increased the value of an experienced human advisor to an owner seeking financing. With the right guidance, an owner can generate demand among lenders and create a more competitive bidding process with the goal of procuring the target funding amount on terms that promote project success.
In an industry being reshaped by innovation, storytelling and negotiation still define successful capital execution. Presenting financials is important, however weaving them into a compelling narrative aligned with a strategic business plan is what moves deals forward. Seasoned advisors draw on years of experience to position an application for a successful outcome.
As experienced commercial real estate operators know, every financing situation is unique, and some can be quite complex. Navigating potential issues and anticipating lenders’ questions has become more difficult given the analytical technologies available to underwriting teams. Ironically, the AI technology embraced by lenders has increased the value of an experienced human advisor to an owner seeking financing. With the right guidance, an owner can generate demand among lenders and create a more competitive bidding process with the goal of procuring the target funding amount on terms that promote project success.
Final Thoughts
Technology has changed how commercial real estate deals are analyzed and tracked – but it hasn’t changed why they get done. Efficiency and data visibility matter, but they don't replace relationships, judgment, or strategic thinking. As the industry continues to evolve, the advantage will belong to those who know how to navigate the growing complexity and lean on capital advisors who bring experience navigating financing initiatives and managing competitive bidding processes.
Talonvest Capital specializes in structuring and negotiating comprehensive capital solutions for owners of industrial, self-storage, multifamily, office, and retail assets. We create tailored capital solutions for our clients by sourcing cutting-edge lending programs and advising on capital markets trends.
Stay Informed
Subscribe to stay up to date on current trends in the perm, bridge, and construction lending market based on our real deal experiences and discussions with banks, life companies, debt funds, private lenders, and CMBS lenders.