Virtual Reality: The New Normal for Commercial Real Estate

Virtual Reality: The New Normal for Commercial Real Estate

Skilled commercial real estate brokers have vivid imaginations. They can walk into an old office building or unfinished retail space and picture all the possibilities: glossy new floors, modern furniture, the new elevator that opens out into a freshly-remodeled amenities space. The average tenant, however, lacks such imaginative powers. Even small, easy-to-fix issues like a bad paint job or dated lighting fixtures can put off potential leasees, making them walk away from an otherwise perfect space.

But what if a simple tool could allow the would-be tenant to see what the broker sees?

This is exactly what virtual reality (VR) technology allows. By wearing a VR headset, potential clients can look at a detailed and realistic 3D virtual world of what a finished office space will look like and take what feels like a physical, built-to-scale tour of the completed space.

Of course, VR isn’t exactly new in real estate. The residential market has been quick to adopt these new tools, as the New York Times reported last year. In fact, right here on the Radical Galaxy Studio website, visitors can explore realtime walkthrough animation examples for apartments and condos. And with a VR headset, these virtual environments can be made infinitely more experiential and interactive—bringing to life un-built architectural spaces.

But the commercial real estate space has lagged far behind the residential market. And because large commercial leasing brokers have been slow to adopt these new technologies, building owners are losing potential revenue while clients hesitate to sign on to a space that doesn’t yet look perfect.

With all that untapped potential, virtual reality is poised to become the next game changer in commercial real estate. After all, aside from fully finishing and furnishing a vacant space, virtual reality is the most effective way to let potential tenants see what they’d be getting. Virtual reality real estate tours, for example, allow cautious clients not only to visualize the final space but also actually move around it, interacting and experiencing every aspect of their future offices, from walking in the lobby to riding the express elevator.

In fact, virtual reality can give potential tenants an interactive, game-like experience. Beyond moving in, out, and around buildings, VR tools allow users to see how the light might change from day to night, and even review different floor plans and design options, swapping out the layout of a floor and moving objects around.

Despite these benefits, in our opinion no large commercial real estate broker has stepped up as of yet to take the lead in the industry with VR technologies. Some of the more innovative companies have taken small steps, creating content for Oculus Rift, Windows Mixed Reality, and other VR headsets and viewers, including those created for use with iPads and mobile devices. Cushman & Wakefield, for example, created a 360 video to give virtual reality real estate tours of Costa Mesa’s Park Tower. Construction companies too have begun to employ VR technologies to help clients visualize finished projects. However, these projects remain, for the most part, case-studies. The first large broker to fully invest in VR marketing has the opportunity to attract clients and claim the market for this value-added service.

The challenge, at the moment, is that the cost of VR technology can seem high at first glance, especially for the more advanced, immersive experiences. Yet because VR tools are so effective at marketing properties, they can quickly and easily recoup their up-front costs. A $10,000 VR project, for example, costs far less than leaving vacant a $50,000-per-month office space. In addition, prices for VR tools are dropping quickly as innovations ramp up and scale. Pioneering entrepreneurs who invest in VR technology now will be positioned to profit in the not-too-distant future. Goldman Sachs projects that by 2025, VR will become a $2.6 billion market in real estate alone.

This means that soon, potential tenants will simply come to expect VR technology as a matter of course. And property owners too will expect their commercial real estate brokers to employ VR tools, demonstrating their commitment to showcase the buildings in innovative ways that attract the best prospective clients to the properties.

Since it’s only a matter of time before VR will become de rigueur in commercial real estate, forward-thinking property owners and brokers are already embracing these tools, integrating them into their business practices today. Those businesses that fail to adopt and adapt to VR now will likely get left behind.

High-Profile: This Virtual Technology Is Making Designers’ Dreams Materialize Before Their Eyes!

High-Profile: This Virtual Technology Is Making Designers’ Dreams Materialize Before Their Eyes!

Imagine being able to walk through your project before construction begins, without having to build model rooms or show suites. Radical Galaxy Studio is making that all possible with their team of designers, architects, and developers who are creating fully immersive virtual reality and augmented reality experiences.

Real estate developers historically used tools like renderings and model rooms for internal decision making purposes and for pre-construction sales and leasing. Virtual reality and augmented reality take renderings to the next level.  While the industry is still in its early ages of adoption, the technology saves clients time and money, and is being adopted by many of the largest developers, construction companies, property managers and architects around the country.

“Virtual reality is not just a marketing tool, it has varied applications that help improve and speed up the development process,” said Matthew Shaffer, founder of Radical Galaxy Studio.  “Every week saved during the development process becomes a great cost savings especially for projects with external financing.”

Virtual reality is being used throughout the development cycle.  During the design phase, developers and architects can use it to get a sense of scale and make modifications to early stage plans, or to review different options instantaneously such as changing ceiling heights or room dimensions. Further along the process, developers have the ability to use virtual and augmented reality for community relations, city council meetings and shadow studies.  Lastly, virtual reality is also being used for marketing purposes to either lease-up or sell a property.

“While experienced professionals can visualize unfinished projects and picture all the possibilities: new hardwood floors, contemporary furniture and the roof top deck with stunning views of Boston, the average tenant often lacks such imaginative powers,” said Shaffer. “Virtual reality allows the potential tenants to see how the building will look when completed, along with giving them the ability to switch between different design schemes until they see one of their own liking.”

Potential buyers can also be given the power to change the flooring options, back splashes, countertops, and other elements to customize the space to their own liking, thus leading to more presale opportunities.  Within the virtual reality world, users can also walk freely into and out of buildings or up and down the stairs, take elevators, peek into closets, and even toggle on light switches and faucets, giving them a better sense of the space layout and allowing them to make better informed buying decisions.

The qualities of virtual reality run the spectrum from mobile VR which can be used with Google Cardboard to high end VR built-outs that use more advanced hardware like the Windows Mixed Reality platform and Oculus.  The more advanced VR is very technical and complex to create, but the results are spectacular and showcase projects in a way that couldn’t otherwise be done.

Virtual reality will continue to transform the real estate business and will soon become common practice, whether it’s real estate brokers or property management companies in New England using 360 video tours integrated in virtual reality portals or developers, interior designers, architects, engineers and construction companies using more advanced solutions as a tool throughout their process.  Along with the increased usage of the technology, hardware is also advancing quickly.  Many of the major tech corporations along with venture-backed companies are investing heavily into the space looking to make the next break-through.

 

Check out the High-Profile article here: https://www.high-profile.com/virtual-technology-making-designers-dreams-materialize-eyes/