Tag: AI

Why Real Estate Is Struggling: Blame AI

On By Ilina RoderickIn AI, Real EstateLeave a comment

Accountants are threatened by AI. Lawyers are threatened by AI. Most of all, software engineers are threatened by AI. 

But real estate shouldn’t be threatened by AI, right? 

Wrong. 

The chart below, prepared by economist Steve Ratter, is shocking but not surprising. At the beginning of 2025, construction spending on everything but AI data centers fell off a cliff and is still falling.

AI investment is reshaping real estate. As capital pours into data centers and borrowing costs rise, traditional real estate projects are feeling the squeeze.

I have seen the result many times over the last couple years. A developer who once raised $10M with a few phone calls struggles to raise $1M. An ingenious redevelopment project on a mountain in New Hampshire is self-funded and proceeding slowly for lack of investors. Meanwhile, a dime-a-dozen “AI-native law firm” raises $20M without difficulty.

Borrowing costs make the playing field even more uneven. The staggering amount of debt incurred to build data centers, added to ongoing government borrowing and the shock of the war in Iran, has pushed interest rates to their highest levels in 20 years. If you’re investing in AI and expect a 100x return, an extra 200 basis points is nothing. But the same 200 basis points turns a promising real estate project into a bad idea. That asymmetry will probably get worse as the Federal Reserve raises interest rates to fight inflation.

And suppose Anthropic and OpenAI raise $75B each in their IPOs. That equity has to come from somewhere.

If I knew where AI is headed, I wouldn’t be writing this blog. But I do know that markets correct and that Americans can’t live in data centers. Someday investors will like real estate again.

Questions? Let me know.

Markley S. Roderick
Lex Nova Law
10 East Stow Road, Suite 250, Marlton, NJ 08053
P: 856.382.8402 | E: mroderick@lexnovalaw.com

Lawyers and AI

Lawyers And Artificial Intelligence: An Update

On By poc-1@evil.testIn AI, Crowdfunding, PredictionsLeave a comment

I posted about lawyers and artificial intelligence in late 2023, predicting that AI tools would drive down the cost of legal services while making high-quality legal service available to more people. The great thing about predictions like that is that nobody can prove you were wrong until it’s too late. So far, however, it hasn’t happened.

I thought AI would enter the legal world through “intermediated” channels like Westlaw. With their enormous, curated databases of court cases, administrative rulings, and other source materials, as well as libraries of excellent legal forms drafted by top-notch lawyers, I expected companies like Westlaw to race quickly to the top, leaving “brute strength” tools like ChatGPT behind.

Since then, I’ve tried just about every AI tool on the market, including the most recent version of Westlaw’s AI tool, CoCounsel. Beginning each demonstration with high hopes, I am always left with great disappointment. 

Here are some things I’d expect from an AI tool for business lawyers:

  • Review Documents:  The tool should analyze an Asset Purchase Agreement or Operating Agreement and tell me (i) how it differs from “market” terms, and (ii) how it should be changed for the benefit of my client.
  • Summarize Documents:  The tool should summarize a legal document. One type of summary would tell me what’s in the document, at any level of detail I want. Another would prepare a summary I can use in an Offering Circular (e.g., “Summary of Management Agreement”).
  • Search Documents:  I’ve drafted approximately seven million Operating Agreements. If I’m looking for a clause I used two years ago, the tool should be able to find it.
  • Improve Documents:  The tool should review my document and point out ambiguities, inconsistencies, mistaken references, and logical gaps. 
  • Draft Sections of Documents:  If I’m drafting an IP License Agreement and need a section saying the Licensee is responsible for prosecuting infringement claims, the tool should produce one with a simple prompt.
  • Draft Whole Documents:  If I need a Rule 144 opinion, the tool should take me through the steps of preparing one, including the Certification from my client.
  • Legal Research:  The tool should vastly improve the process of legal research.
  • Reserve Flights:  Not necessary. 

In the earliest stages, I don’t expect an AI tool to produce great results. During a recent demonstration, the sales rep said, “You should view this as the work of a second-year lawyer.” Unfortunately, it was more like the work of a high school junior.

The good news is that brute strength tools like ChatGPT have improved dramatically. You still can’t rely on them – recently ChatGPT produced a quote from a court case speaking directly to my issue, but when I checked (always check), the quote was hallucinated – they are better than the intermediated tools, so far. 

When ChatGPT was released, many experts predicted that lawyers were the most vulnerable. Two and a half years later, that hasn’t happened, either. If you’re a lawyer, I guess that’s good news in a different way.

Questions? Let me know.