With massive investments, widespread adoption, and a growing list of technological feats, Artificial Intelligence (AI) demonstrates every appearance of a sure winner, perhaps the next big thing that will radically change society, much of the economy, and with them, commercial real estate (CRE).

Second in a Three-Part Series on Artificial Intelligence and CRE.

We usually think of capital as something which has value. Traditionally we have defined that value by the willingness of borrowers to pay interest and by the returns which investors see as acceptable. But now we have a new consideration. 

Current real estate interest rates are in free-fall, now at depths never seen in the US. We can blame the COVID-19 pandemic in part for today’s ultra-low interest rates, but the reality is that rates have largely been in decline since the 1980s. It hasn’t been a straight line down, but the general trend has been lower and lower rates over time.

A Q&A with Rob Durand, KBS Executive Vice President, Finance