CRE’s Magical Mystery Tour
is Coming To Take You Away


Brent Carroll

A virtual reality tour of CRE property is the next best thing to being there

In case there is anyone left with a doubt, virtual reality (VR) is no fad; it’s here to stay and continuing to change the landscape of commercial real estate. Statista reports that VR is expected to generate $15.6 billion in the economy by 2020.

A virtual tour is worth a thousand words: a 360-degree rotating view of a property brings more value than one-dimensional photographs or marketing copy. In most cases, users can control the tour’s speed and direction with a simple keyboard or specialized goggles.

Companies like Matterport are rapidly developing media system technology to create, navigate, and share 3D spaces, making them increasingly more affordable, dynamic and user-friendly.

Apartments.com reports that visitors to their website spend 3x-6x more time engaging with property listings that offer a virtual reality experience. Matterport 3D tours placed #2 on the Forbes list of 23 Bulletproof Real Estate Ideas.

Companies specializing in virtual reality tours of commercial properties offer varying packages, but an average offer can range from $99 and up. This includes four property views, including the necessary photography and tour setup (more views can be available at additional cost). Tours can also be viewed instantly, but some require specialized software. Features can include narration/streaming audio and zoom functions. Clickable maps and digital floor plans can also be included.

Virtual reality can be drilled down to two more specific types:

Augmented reality (AR) — unlike virtual reality, which allows you to wrap yourself into complete virtual environment, AR overlays visuals and information on top of what you are already seeing, so that they exist together. In essence, you are inviting in more images, in addition to the ones that are already there. It helps to show you both what exists and what can/will exist, so you’re seeing both the present and the future. It can usually be observed through a smartphone camera.

A good example of the use of AR: placing furnishing and office equipment into a vacant or unfinished space, allowing potential tenants to imagine how it will ultimately look. For example, the Roomy platform offers a simple drag-and-drop feature so that agents can implement a “virtual staging” of the property. Users can purchase the actual furniture and equipment from national retailers, including Amazon.

Another benefit to using AR — the ability to highlight and feature aspects of a property that a prospective tenant might miss. For instance, the platform can point out a new HVAC system (including its carbon footprint and annual dollar savings) or draw attention to the smart devices that may be hidden in walls (sound speakers).

Mixed reality (MR) — mixed reality is a combination of VR, AR and the Internet of Things, so that the digital and physical worlds can interact. Using a special headset, you first scan the space, then map it the way you want it or plan to use it. This customized approach appeals to both brokers and customers, saving scheduling and travel hassles. Properties can be shown to anyone in the world, day or night.

A customer can tour a property in a remote location wearing a special set of goggles, with description accompanying what is being seen. That same customer can also interact with a broker, who may be in a separate location but wearing the same MR goggles.

According to The Wall Street Journal, MR is being fueled by investments in platforms, devices, and software ecosystems, with the ultimate goal of replacing keyboards and flat displays with entirely new paradigms for communication and collaboration.

The energy of MR is optimistic, showing us what can be instead of what already is. It also lets buyers and investors scan and comprehend information quickly and visually, allowing for shared knowledge (and vision). It communicates the detail needed to make more informed decisions.

Virtual Reality is providing another benefit to commercial real estate investors: protecting against property damage. VR tours allow owners to visually document every inch of their property. This allows them to submit before/after video to insurance companies when filing claims. Documentation like this can also help repair crews better understand what needs to be done.

The technology continues to interest investors. Crunchbase reports that, in 2017, at least 217 companies in the AR and VR space have raised funding rounds, bringing in $2.1 billion. Of that, more than $900 million went to just two companies: Magic Leap and Unity Technologies.

 

CRE’s Magical Mystery Tour<BR>is Coming To Take You Away executive photo Brent Carroll website B 240x300
Brent Carroll is senior vice president for KBS Realty Advisors and its affiliate KBS Capital Advisors. He is responsible for the performance and acquisitions of KBS assets.