NEW YORK--(BUSINESS WIRE)--Northspyre, the leading real estate development platform for project delivery and capital management, today announced the launch of Northspyre AI – the first real estate-specific generative artificial intelligence (AI) tool designed to drive down costs by eliminating scope gaps in the construction bidding process and proactively flagging cost-saving opportunities on every line item.
Modeled with over $175 billion in real estate development projects and hundreds of thousands of project documents, Northspyre AI’s predictive algorithm enables developers to cut costs and refine their budget in the pre-development stage.
Northspyre AI is highlighted by a functionality designed to eliminate scope gaps in vendor bid proposals, one of the most frequent causes of cost overruns in construction. Using large language models fine-tuned and trained on thousands of vendor agreements categorized by specific scopes of work (i.e. structural engineers, interior designers, etc), the platform reviews vendors’ incoming proposals and compares them with similar agreements. Leveraging the large language model, it then proactively identifies any shortcomings in the contracts, eliminating scope gaps before the contracts are signed.
With large-scale construction projects often involving hundreds of vendors, countless change orders can have a material impact on the financial viability of a development; by eliminating the need for the vast majority of change orders, this functionality is expected to provide developers with savings of north of $1 million on large projects.
“In today’s economic environment, where factors like rising construction and material costs and capital market illiquidity pose a constant threat to commercial real estate development, the need for the industry to capitalize on technology innovation has never been greater,” said William Sankey, co-founder and CEO of Northspyre. “Developers are working with hundreds of vendors across a portfolio, which is extremely challenging when relying on outdated, manual reporting methods that are highly prone to human error. By leveraging AI to not only review budgets and incoming contracts but provide actionable suggestions for cost savings, developers are setting their projects up for success before a shovel even hits the ground.”
Key features of Northspyre AI include:
- Vendor Recommendations: The platform reviews early project budgets to identify where costs can be reduced by recommending vendors who are likely to bid competitively. The recommendations are based in part on an algorithm driven by a proprietary “hungriness rating” — an algorithm that looks at the likelihood that a vendor is especially eager to bid aggressively on a given project based on data about the vendor, timing, and established academic research on construction bidding. Northspyre’s algorithm predicts and estimates how much a developer could save on a given budget line, prompting users to invite suggested vendors to bid directly on those aspects of the project.
- Bid Process Simplification: The platform automatically drafts responses to bidding vendors, requesting they update bids to reflect missing scope or clarify potentially missing items flagged by the Northspyre AI system, giving developers time back by automating tedious administrative work as well as reducing the potential for future change orders driven by scope gaps and vendor buyout misses.
- Vendor Ratings: The technology allows Northspyre users to rate vendors they have collaborated with, creating a reference for their teams to use on future projects. Users can also choose to share their feedback with the broader Northspyre community; those who share enough reviews gain access to other users’ insights from across the platform, making it easier for developers to choose the right vendors by encouraging information sharing.
“The U.S. commercial real estate industry is worth trillions of dollars, yet the industry’s tech stack has not kept up,” said Jeff Fluhr, General Partner at Craft Ventures. “Northspyre was created specifically for developers managing complex real estate projects, and has already brought much-needed innovation to this space. Their new AI features meet the growing industry demand for technology solutions that help developers reduce cost overruns and unpredictability. This is especially needed in a time when commercial real estate developers are up against inflated construction costs and higher interest rates.”
Craft Ventures is an early investor in Northspyre. The firm led Northspyre’s $7.5 million Series-A funding round in 2020 and participated in the company’s $25 million Series-B funding in 2022.
Northspyre is the real estate industry’s first purpose-built intelligence platform for real estate owners and developers managing complex projects such as ground-up developments, fit-outs, and major renovations across all asset classes, including multifamily, office, retail, affordable housing, hospitality and mixed-use. Northspyre began servicing customers in the New York and Boston markets four years ago. Since then it has developed a national footprint, attracting the attention of developers in every major metro area in the country.
About Northspyre
Northspyre is a cloud-based intelligence platform that empowers real estate professionals to make proactive, data-driven decisions on development, capital and asset projects across real estate project types. Created specifically to meet the needs of owners, developers, project management firms and internal real estate teams, Northspyre leverages the power of automation, data analytics and artificial intelligence to deliver projects on time and within budget. Northspyre’s technology is dedicated to helping teams deliver even the most complex project or portfolio on-time and on-budget. Since 2017, Northspyre has facilitated more than $175 billion in client projects. To learn more, visit www.northspyre.com.
