CRE Operators turn to AI firm to Uncover Hidden Coronavirus Risk

Okapi AI is applying its artificial intelligence platform to the coronavirus in an effort to pinpoint new forms of financial risk

by Mariah Brown in GlobeSt on March 16, 2020

With quarantines on the rise and the markets going haywire, no-one really knows when the Coronavirus pandemic will all end. This uncertainty has led to a certain amount of risk across the board for companies of all types who are leaning on operational data to identify Coronavirus vulnerabilities in their building portfolios, Ailon Velger, chief product officer at property technology company Okapi, who is working with building landlords to scan for operational risk to do with the virus, tells GlobeSt.com.

Okapi’s “coronavirus risk” indicator pinpoints to landlords specific tenants whose business operations may be particularly vulnerable to the virus known as COVID-19. “This is essentially a new risk factor that we’ve added to Okapi’s artificial intelligence platform, which is designed to highlight potential financial risk as it pertains to building operations and tenant satisfaction,” Velger said.

There are a number of relevant factors in identifying how a tenant’s business and thereby, their lease obligations, may be affected by the spread of COVID-19, many of which relate to location. Firms with satellite offices in areas that have been acutely affected by the outbreak are more likely to be at risk. Similarly, if a sizable portion of the company’s sales are in an affected area — or they have a manufacturing center in one such area — those factors can present challenges to revenues or production, which can have ripple effects across the entire company. There are also risks associated with companies whose investors or shareholders are highly connected to the affected markets. Finally, the specifics of the product or services are very relevant: Firms with ties to the travel industry will be much more vulnerable than those in most other industries, according to Velger. 

we’ve identified a number of tenants with coronavirus risk due to a range of factors

Small landlords with a handful of tenants might already know the details of their tenants’ business operations. But for large property owners with dozens of buildings and many hundreds of tenants, it can be to identify risk, in which a tool to scan pertinent information can help pinpoint where to apply resources.

“Thus far, we’ve identified a number of tenants with coronavirus risk due to a range of factors. In one case, a tenant’s parent company had significant revenues and a sizable workforce in affected areas; in another, a large shareholder of the tenant had a major pending transaction that was now in potential jeopardy because of the other deal party’s location,” Velger said.

Depending on the individual lease agreement, tenants who are adversely affected by forces of nature, such as pandemics, may be able to terminate their lease. “In light of this, when our platform identifies instances of significant coronavirus risk, landlords are notified to check their lease agreements,” Velger said.


Mariah Brown

Mariah Brown
Mariah Brown

Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.

More from this author