Of course, currently the most disruptive/transformative business technology is AI. Probably the biggest advantage AI has is being able to evaluate huge amounts of data, quickly, which results in faster, better-informed decision-making.
“AI manages all types of commercial real estate transactions, from new sites to renewals, relocations, and more, leveraging your entire lease portfolio, detailed site analysis, and predictive analytics to help you make the best real estate decisions for your business,” stated AI firm Tango Analytics, which develops site selection software. “Artificial intelligence, machine learning algorithms, and geographic information systems (GIS) together can help organizations build site models, create sales forecasts, and evaluate real estate opportunities.”
AI shortens time to market by having a role in almost every aspect of the site selection process. By completing these tasks with rapid speed and impressive accuracy, AI makes it much easier for a site selection team to meet compressed timelines.
What AI Can Do
By combining GIS with AI, site selectors can evaluate a wide range of data, including market trends, consumer behavior patterns, and infrastructure. AI automates the site selection and feasibility analysis process. It provides high-precision digital tools that enable site selection professionals to select the best sites for their clients, in record speed. A big part of AI’s allure is its ability to analyze large volumes of data quickly. It can identify new patterns or trends that are hidden in the data, which can give a firm a competitive edge in identifying new opportunities.
At one time a largely manual process, over the past few years site selection has become increasingly more digital. Most site selectors have not delved into AI at a deep level — below are some key tasks that AI can do with top accuracy and speed, creating an agility that a site selection team has never experienced before.
- Mapping and data analytics: By combining GIS with AI, site selectors can evaluate a wide range of data, including market trends, consumer behavior patterns, and infrastructure (on-site, transportation, logistics).
“By leveraging historical data and algorithms, businesses can develop models that forecast viability and profitability of a site based on data for foot traffic, sales projections, market saturation, and other economic indicators,” said Love. “By relying on predictive analytics, companies can minimize risks and enhance their competitive edge. Geospatial technology and mapping tools provide real-time visualization of data layers, including population density, competitor locations, customer proximity, and other relevant variables.”
- Demographics and market analysis: AI allows site selectors to dive quickly into demographics and market data. It analyzes key factors such as population size, growth trends, income levels, age distribution, and consumer behavior patterns. This information is vital for determining how well the target market aligns with what the customer is seeking. A huge amount of data exists that AI can analyze quickly — for example, the U.S Census and STI PopStats provide critical details regarding the population of an area, such as age, gender, marital status, ethnicity, income, education, employment, and more. Also useful are STI Spending Patterns, which help “companies make informed decisions on everything from site location, to merchandising, to marketing.”
- Compare similar sites: In many cases, site selection consultants derive a short list of sites from a much longer list of candidate locations. Not only will AI help create those lists, it will also compare multiple sites, using as many criteria as needed to make the final decision. For example, AI helps selection teams take a deeper look at important factors, such as business environment, crime rates, and even climate risk. Foot traffic data can reveal visitation patterns that can greatly enhance or reduce a property’s viability.
AI is also a very effective tool for drilling deeper into the data, such as the capacity of utility systems to meet the current and future needs of companies looking to locate in the area. “AI can better analyze the demographics, traffic patterns, geographic details, and other characteristics of the surrounding trade area, including when different parts of the trade area see peak demand,” according to Tango. Also, when searching for an AI vendor, be sure it can combine internal corporate or client data with as many of available data sources as possible, to best evaluate target areas.
- Infrastructure specifics: Easy access to interstate highways, airports, rail, and intermodal facilities is vital for many companies. In addition to proximity, site selectors must factor in time and travel costs (and sometimes weather delays) to major cities, distribution centers, and suppliers.
AI is also a very effective tool for drilling deeper into the data, such as the capacity of utility systems to meet the current and future needs of companies looking to locate in the area. AI can be programmed to review and evaluate local zoning regulations, building codes, and permit requirements. Using this information aids in discussions with local authorities regarding the processes necessary for obtaining permits, as well as identifying any potential restrictions or delays.
- Future expansion and growth potential: Of course, most companies are very strategic in their short-term and long-term goals, including having a plan in place that deals with the possibility of future expansion on the site. “AI will assess the availability of additional space or adjacent land, as well as the potential for business growth in the area,” said Love. “A site that can accommodate a client’s future needs can save you from the hassle of having to relocate in the later stages.”
Other considerations include assessing the availability and quality of the labor force over the long term in the area. AI can also easily analyze the availability and role of local financial institutions in workforce training.
With AI, scale or geographic reach is no problem — I can even be used by companies that want to consider as many factors as possible before deciding on the viability of reshoring. They want to secure a domestic location first, with as many business advantages as possible, before they take the leap.
At some scale within a company’s operations, technology (including AI) is becoming a vital tool in site selection today, allowing for actionable insights and deeper thinking. “The data-driven approach — enabled by technologies like AI, GIS, data analytics, machine learning, and virtual reality — has revolutionized the site selection process, leading to more informed decisions and higher chances of success,” said Love. “As technology continues to advance, it is expected that site selection will become even more precise, efficient, and strategic, enabling businesses to unlock new opportunities and thrive in an increasingly competitive landscape.”