The next stage of growth for a commercial real estate firm requires different infrastructure, and that infrastructure has to be built by an operator who has sat in IC, not by a vendor who has sold software into firms that have.
I have spent twenty years as a principal-side commercial real estate operator. A decade at Vornado Realty Trust on a $5B institutional portfolio. Acquisitions at Aspen Heights across 91 university markets. Three years as Chief Investment Officer at Casoro Group, closing 18 transactions over $600M. Across those seats: roughly $3B transacted on the principal side, as a deal-team member through CIO, plus $150M of equity raised and $300M of debt placed.
Across those roles a single problem kept reappearing in different costumes: the gap between an investment thesis and the operating infrastructure required to execute it is where most firms get stuck. In 2024 that problem changed character. Generative AI matured to the point where the components of an institutional operating platform — the systems that took Blackstone, Starwood, and Greystar decades to build — became buildable by a single operator and a small team. McKinsey Global Institute estimates $110–180 billion of value at stake in commercial real estate from generative AI[1], and almost none of it has been captured yet.
This page is the operator's case for who will lead that capture: people who have signed an investment memo, defended it in IC, and watched LPs underwrite the platform behind it.
1. Capital follows infrastructure.
The claim. LPs underwrite the platform before they underwrite the next deal. What allocators actually ask a GP is how quickly the firm identifies NOI variance against a business plan, how the portfolio monitoring process works, and how proprietary deal flow gets generated. Each of those is an infrastructure question, asked in operational due diligence before the commitment is decided. Deloitte's 2024 Commercial Real Estate Outlook found 76% of CRE firms exploring or implementing AI[2] — at that adoption rate, having AI is table stakes, and the ODD team scores the answers to the infrastructure questions.
2. The Coordination Tax is the real target.
The claim. The highest-leverage use of AI in a commercial real estate firm is coordination removal. McKinsey's research on knowledge-work organizations places coordination overhead at 60–70% of knowledge-work time[3]. In a commercial real estate firm of ten to thirty people that overhead is concrete — status updates, reforecast cycles, meeting prep, the analyst who spends three days assembling an underwriting file and half a day analyzing it, the asset manager whose first two weeks of every quarter disappear into compiling property reports. Removing that layer gives the analyst those three days back.
3. The advisor has to have carried deal risk.
The claim. The advisor evaluating your firm's AI architecture needs to have underwritten a deal, read a T12, and reviewed a property condition report — to have carried deal risk personally. In Scale AI and the Center for AI Safety's 2025 Remote Labor Index — 240 real, paid professional projects run end-to-end through frontier AI systems — 97.5% of outputs failed to reach the quality a paying client would accept[4]. The reason is that the context required to do the work well existed outside the prompt — in the deal file, the T12, the notes from the last IC discussion. An operator carries that context into the build.
"Institutional no longer means what it once did. The field has grown crowded, and the differentiator is no longer size or pedigree. It is portfolio construction, asset management, governance, and the demonstrated ability to execute."
Where an operator-led advisor and a software vendor diverge
Three differences built into the economics of each seat:
- Recommend against software. A vendor's economics require selling software. An advisor's economics permit — and often require — recommending that the firm rebuild a workflow without buying anything new.
- Sit in IC. An advisor with twenty years of principal-side investing can attend an investment committee meeting and tell the difference between a model that produces the right number and a model that produces the right judgment. Telling those apart is a skill formed in IC, on live deals.
- Hold a fiduciary posture. A retained advisor is fiduciary to the firm — same posture as the CFO, the GC, the auditor. A vendor is fiduciary to its shareholders. Those two postures produce different recommendations on the same fact pattern.
Capital follows infrastructure. With three-quarters of the industry already using or piloting AI, the differentiation sits in the workflow underneath the tools — how a deal file becomes a model output, and who is accountable for the number that comes back. Those are the two questions an operational due diligence team scores.
— Chirag Hathiramani is a Strategic Advisor for Commercial Real Estate, providing CIO and AI-related services. He is a 20-year principal-side CRE operator and former Chief Investment Officer, with roughly $3B transacted on the principal side (deal-team member through CIO) and production AI systems running on live deals. He is the author of The Platform CEO (foreword by Joel Heikenfeld, Managing Director, Northmarq). He works with US commercial real estate firms in the $500M to $5B range. To schedule a 25-minute diagnostic, visit /contact.