AI in the Physical World: The Next Level of Digital Change in Commercial Real Estate

By Gaku Ueda | July 29, 2025

Commercial real estate has entered a new stage of digital change with artificial intelligence (AI). The industry already enjoys the advantages of IoT devices, smart sensors and digital twins. Now, with AI, building management can be done smarter.

AI in the physical world is the blend of mechanical systems, infrastructure and robotics, enabling buildings to sense, analyze and act without human intervention. This shift isn’t incremental – it’s transformational, opening a new chapter where buildings are not just smart but self-optimizing, self-maintaining and even self-patrolling.

From Connected Systems to Independent Infrastructure

In the past, digital tools in CRE mainly helped collect data like meters, sensors and analytics dashboards, allowing building owners to see how their buildings performed. Physical AI takes that a step further: It helps buildings act on that data autonomously.

A notable example is The Edge in Amsterdam. The 430,000-square-foot office is known for its smart setup, which includes over 30,000 sensors that work with AI systems. These sensors help the building adjust lighting, heating and space use based on the number of people present and outside conditions. Dubbed the world’s greenest building, The Edge saves more than 70% of energy compared to regular offices and is expected to have an annual return of 13.5% from energy and operating savings.

This ability to respond quickly to usage and weather isn’t just for trophy buildings — it’s also a possibility for many mid-sized properties, especially when paired with AI.