How AI automation can fit into construction workflows: McKinsey

Why this matters

The integration of artificial intelligence into construction workflows marks a critical inflection point for institutional commercial real estate, reflecting broader shifts in capital allocation and operational efficiency. McKinsey’s emphasis on the strategic choice between building proprietary AI tools versus purchasing existing solutions underscores a growing recognition that technology adoption is no longer ancillary but central to competitive positioning in development and construction. For institutional investors and fund managers, this signals a potential recalibration in project risk profiles and cost structures. AI-driven automation could streamline timelines, reduce labor dependencies, and improve accuracy in cost forecasting—factors that directly influence underwriting assumptions and return expectations. Moreover, the decision to build or buy AI capabilities may become a differentiator among developers and contractors, affecting partnership dynamics and capital deployment strategies. From a lending perspective, enhanced construction workflows powered by AI could mitigate some execution risks that have tightened financing conditions in recent cycles. Overall, this development points to a maturing intersection of technology and hard assets, where institutional capital must increasingly factor in digital innovation as a component of asset and portfolio management in US commercial real estate.

Editorial analysis · AI-assisted

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