Disclosure
Pacific Software Ventures (PSV) builds AI underwriting systems for CRE firms, so we have a stake in what you choose. The checklist below applies to any tool, ours included.
What is AI underwriting in CRE?
AI underwriting for commercial real estate means an AI reads the deal documents, the OM, rent roll, T-12 and leases, and builds the first pass of the underwriting in your model, with every number linked to the page or cell it came from. An analyst then reviews it instead of keying it in. The AI does the extraction and the first draft. People keep the assumptions, the market view and the decision. Westlake Realty Group cut per-deal underwriting from 6-8 hours of senior time to a 20-minute review, in its own model with every number traced to source.
What AI does well in underwriting
- Reads the rent roll and T-12. Pulls units, leases, rents, expirations and operating lines out of PDFs and spreadsheets in whatever format the seller sent.
- Fills your model, not a new one. Puts those numbers into your own template, so the output looks like every other deal your committee has seen.
- Normalizes the operating statement. Maps the seller's line items to your categories and flags one-time items for you to decide on.
- Cites every number. Links each figure back to the document, page and cell, so review means checking sources, not retyping them.
- Flags what doesn't tie out. Rent roll totals that miss the T-12, leases that expire inside the hold, concessions buried in the notes.
What stays with your team
The judgment calls. Exit cap, rent growth, the market read, whether the business plan is real, and the decision to bid. AI can show you the inputs and the sensitivities. It shouldn't pick them.
How to judge any AI underwriting tool
- Can you trace every number?. Click any figure and see the source. If you can't, you're re-checking everything by hand and saved nothing.
- Does it work in your model?. A tool that forces its own model makes you translate every deal back into yours.
- Test it on a deal you already underwrote. You know the right answers, so you'll see exactly what it got wrong. Do this before you trust it on a live deal.
- Where do your documents go?. Ask where deal files are stored, who can see them and whether they're used for training. Is AI safe for deal documents
- Who fixes it when your template changes?. Models change. Someone has to keep the AI in step with them.
Your three options
- Buy underwriting software. Fastest to start, and you work in the vendor's model and workflow. CRE underwriting software, compared
- Do it yourself in Claude. Cheapest, and works well for a first pass if you set it up to cite its sources. Claude for real estate underwriting
- Have it built in your own model (ours). We build the system around your template and your rules, then stay on as your AI team. That is what Westlake Realty Group did. Read the Westlake Realty Group case study
Common questions
- What is AI underwriting in commercial real estate?
- An AI reads the deal documents and builds the first pass of the underwriting, the rent roll, T-12 and lease terms in your model, with each number linked to its source. An analyst reviews and adjusts it, and people make the call.
- Can AI underwrite a commercial real estate deal by itself?
- No, and you shouldn't want it to. It can do the extraction and the first draft. The assumptions, the market view and the decision stay with your team.
- How accurate is AI underwriting?
- It depends on the documents and the setup. The only way to know for your deals is to run it on one you already underwrote and compare. Insist on a source for every number, so mistakes are easy to find.
- How much time does AI underwriting save?
- Westlake Realty Group cut per-deal underwriting from 6-8 hours of senior time to a 20-minute review, in its own model with every number traced to source.
- Is it safe to put deal documents into AI?
- It can be, on the right plan with the right settings. Check where files are stored, whether they're used for training and who can see them, and check your data vendors' terms before uploading their exports.