Prologis CEO Hamid Moghadam expects artificial intelligence to play a pivotal role across the industrial property giant's business, including site selection, determining warehouse leasing rates and setting property values.
AI will grow in importance as the real estate investment trust looks to expand beyond commercial real estate and into providing full-service logistics solutions, Moghadam said. He made his comments last week during Prologis' annual Groundbreakers event that focused on innovation in its hometown of San Francisco.
"AI is a big, fast-moving train," Moghadam said. "You better get on it, or you're going to get run over by it. But before you can engage with AI and get value out of it, you have to have data and you have to have data digitized.”
Prologis has embraced the technology by investing in TestFit, a Dallas-based AI software startup and maker of products that can be used to help identify potential sites for new warehouses and distribution centers.
For these reasons, Moghadam, who first started in the real estate business 40 years ago and now leads the world's biggest owner of industrial property, is Person of the Week.
WHO: Hamid Moghadam, co-founder, CEO and chairman, Prologis
STREET CRED: Moghadam co-founded the real estate development company AMB Property Corp. in 1983. He took the company public in the mid-1990s and led AMB's acquisition of Prologis in 2011 to create an industrial powerhouse that assumed the Prologis name upon integration of the two companies. Today, Prologis has about 1 billion square feet of industrial real estate.
WHAT'S HAPPENING? Prologis is investing in zero-emission electric truck charging stations, autonomous mobile robots and artificial intelligence-guided warehouse management tools as it looks to expand beyond its traditional role as a real estate landlord, Moghadam said during a joint appearance with Home Depot CEO Ted Decker at the conference. The home improvement chain is one of Prologis' biggest customers. The same day, TestFit, a Dallas-based AI software startup, announced that Prologis is using its software to help identify new warehouse sites. Prologis Ventures, the warehouse giant's investment arm, last year co-led a $20 million Series A round of funding in TestFit.
WHY IT MATTERS: Artificial intelligence has driven growth in several segments of commercial real estate, including office leasing, data center development and hotel reservation booking. Tech companies involved with the fast-growing artificial intelligence industry have signed a flurry of office leases in San Francisco and other cities in recent months. The intensifying bid for dominance among tech giants Amazon, Google and Microsoft is expected to drive investment and double-digit growth for the data center industry over the next five years, according to analysis this year from real estate services firm JLL.
Editor's Note: CoStar News has launched a feature called Person of the Week, highlighting someone whose actions, statements or issues affected the commercial real estate industry. If you'd like to nominate someone for consideration, please email news@costar.com.