How virtual reality is already changing commercial real estate June 29, 2017 | Alex Richardson

It’s not you; virtual reality is just in a weird place right now. After decades of attention in novels, think pieces, and decidedly 2D science fiction movies, virtual reality is suddenly and bewilderingly real, and yet it sometimes feels like nobody noticed.

In commercial real estate, though, someone is noticing, and it is already having an impact on the industry. Soon, VR leaders predict, the real estate industry will wonder how they ever got by without ubiquitous VR goggles.

Over the last few years, a number of companies have begun experimenting with ways to improve the real estate selling and renting process using virtual and augmented reality. There are some major hurdles to overcome, but someday soon, you may find yourself putting on glasses to tour a property across the country.

Virtual reality and its slightly more obscure cousin augmented reality are two sides of the same coin. VR is a totally filmed or constructed experience, while AR involves a real view ‘through’ the glasses with additional images or details layered on top. Both have applications in real estate.

 

Virtual reality

Bryn Erickson and his cofounders started Realvision three years ago with the ambition of becoming the Zillow or Trulia of VR. The idea is simple, even if the execution will take some doing: Accumulate 360-degree footage until the critical mass is reached at which Realvision becomes the default solution for VR listings.

“I’m always talking to brokers and telling them, one of the coolest things you can do for your clients is to get a bunch of custom-branded Google Cardboard headsets and do the mobile phone VR experience,” Erickson told Aquicore. “You give them a headset with their mobile device in there and put them in a property that’s a thousand miles away. Just about everyone I’ve spoken with remembers the first time they put on a headset and they were like, ‘Woah!’”

It’s pretty easy to understand the appeal of virtual reality for real estate agents and brokers. In the same way that the internet changed the game by allowing potential buyers and renters to see pictures of properties all over the world in seconds, VR lets you put a potential buyer in the space. They can look around, get a sense for what it would be like to be there, and then view another property in an instant.

The cost of VR film equipment and the technical expertise required to use it are slowing this down for now, but both will get cheaper as virtual reality gets more common. The difficulty of getting to that critical mass at which every listing has to use the system is real, but that’s a matter for the market to decide; it’s likely that some company will become a dominant platform for VR listings, even if it isn’t Realvision.

The other thing that virtual reality is already being used for is touring properties that have yet to be built. Companies like Virtual Xperience are using 3D modeling to mock up the interiors of planned buildings for potential investors, buyers, and sometimes even renters. Right now, this technology is too expensive to be used in all but the highest value cases, but expect prices to come down over time.

 

Augmented reality

Anyone under the age of 35 is likely familiar with Pokemon Go, the augmented reality game that achieved massive, if short-lived, popularity last year. The game engaged users’ cameras to digitally “place” Pokemon in players’ local environments.

In real estate, augmented reality is anticipated to play a more serious role. Using the same kind of 3D modeling, companies are able to place furnishings and other personalizing features into an unfinished space, allowing potential tenants to imagine themselves living or working in the space. While a detailed mock up of a finished space is out of most realtors’ budgets, simple drag-and-drop tools are already coming on to the market.

Another useful feature of AR is the ability to pack detailed information into a building’s “digital shadow.” Prospective tenants might miss hidden features in a building, like an IoT energy management system or a state of the art HVAC system, but the saved money and green value that those features represent could tip the scales in a building’s favor. With augmented reality, those features can be highlighted with detailed information about their impact to the tenant.

In all of this, it’s unclear how the role of real estate professionals will change. There is potentially less of a need for an agent to show a property if prospective buyers and renters can tour a property from the comfort of their own home, complete with detailed notes explaining the best features, but Erickson doesn’t think agents are going away anytime soon. For one thing, someone will be needed to coordinate the effort to present a property, both in real life and online, in its best light. For another, the later stages of the sales and rental cycle will still almost certainly involve a real life tour and personal connections.

“Our clients are real estate brokers and agents,” Erickson said. “We want to connect them with people who are interested in properties and do that with virtual reality.”

About The Author

Alex Richardson is a staff writer at Aquicore. He writes about green policy, energy efficiency, and innovation that affects commercial real estate. Alex.Richardson@aquicore.com.