Life has been abruptly disrupted and the business world is in crisis mode due to the COVID-19 pandemic and further fueled by an oil price war. The necessary actions taken to “flatten the curve” will hopefully show resultant benefits soon. However, the duration of social distancing, remote learning and shelter at home remain unclear. What is clear is that all of these precautionary health measures are having a tremendous impact on the economy and our business practices.
This collective uncertainty has caused great volatility in the market as it experienced a cumulative drop of over 30%. Just recently the Dow dived by 2,997 points in one day, a 12.93% loss. This sell-off represented the index’s biggest percentage decline since the “Black Monday” crash of 1987 — and the 2nd worst in its 100-plus year history — as well as its largest point decline on record. This uncertainty has created turmoil in commercial real estate as well. Rents are being waved or renegotiated, foreclosures and evictions have been suspended, and deal flow has paused. (It doesn't help that major investors like Carl Icahn almost immediately announced they are shorting CMBS credit default swaps.) How long will this trend continue?
What we do know is, (i) in times of crisis hard assets like real estate tend to have greater appeal, and (ii) since real estate is a physical asset and location is important, people want to examine the opportunity before making a decision. The challenge with the latter remains travel restrictions, social distancing and various governmental health and safety restrictions precluding, or significantly limiting site visits. The inability to show properties is stagnating deal flow.
The real estate industry has never previously been so negatively impacted by travel restrictions. The data shows that the average attendance at open houses in New York was dropping by approximately 15% per week until the latest restrictions have effectively precluded this interaction. Commercial transactions are being similarly frustrated.
Fortunately, due to today’s technology a viable and affordable solution is available to overcome this problem – Virtual Realty or “VR”. VR solutions such as the Pix QuickTour models provide an alternative allowing deals to continue to advance despite the imposition of restrictions. These models allow people to experience virtual site tours from anywhere in the world. The visible characteristics of the property, as well as relevant data, can be readily available to interested investors or tenants without the need for facemasks or elbow bumps. Given today’s unusual circumstances, VR can provide additional benefits not achieved in traditional site visits. Here’s how and why VR is any easy, safe and cost-effective way to fulfill a key component of the real estate transaction process.
1. Social Distancing Virtual Tours allow you and potential clients to interactively explore properties remotely, from the on-line comfort of home or office. Experience properties and spaces as if you were there together, evaluating each one with real-time functionality. It’s so convenient you may decide to incorporate this time-savings practice well after the emergency restrictions are lifted.
2. Time & Cost Savings / Better Decision Making
In the time it takes to visit 1 property, you can virtually visit 10 using on-line VR tours. You can also do it any time and from anywhere. This means less travel and less associated costs, less schedule disruptions and more time to focus on the deal rather than the perfunctory visits – and the models can typically be produced in just days.
3. No Special Hardware Needed, Unless you Want
Virtual tours can be viewed on any web-enabled device – phones, tablets and computers. They can be delivered by embedding them in listings, websites and e- marketing campaigns as well as linked from traditional marketing materials. If you want a fully immersive experience, you can use a range of head-mounted displays, some of which incorporate your smart phone. This may also impress the remote learners in your house.
Once all the reference materials and information were provided, this PIX QuickTour was delivered within a week, and then integrated into the client’s listing, eMarketing and PDF brochures. This greatly helped the client understand the design’s layout and functionality.
4. Improve Returns on New Developments VR tours allow potential clients to explore the exterior of the property as well as its units and key amenities, even pre-construction. With Pix’ help, one client was able to promote a large-scale student housing project, achieving a 93% occupancy rate during construction, which finished just as the school year began. Whether it is bringing rental income or unit sales forward, carrying costs can be dramatically reduced and returns greatly improved by employing VR.
La Salle Housing Development
This is one of several model homes within a larger development which includes several custom finishes and furnishings.
Both Crossings Heritage and the La Salle QuickTours have assisted the developers in the pre-leasing and pre-sales process. 5. Individualize the Space
Seeing the space whether in-person, or via a photo, rendering or video is important.Staged spaces can enhance a client’s reaction.However, the prospects’ preferences matter and the evaluation of options can be distracting and time consuming.As the saying goes, “nothing kills deals like time”.VR changes this dynamic by allowing prospects to instantaneously swap materials and options as part of their evaluation of the space.Additionally, the associated expenses with each upgrade can be tracked through the model.
Crossings at Heritage Apartment Complex
This PIX QuickTour was delivered 3 ways:
The unit’s 4 staged packages were displayed and the developer took advantage of QuickTour’s unlimited renderings to create their website.
6. Augmented Data Within each virtual model, site or unit specific data can be integrated into the user experience.Relevant information can be provided at appropriate locations within the model using audio or video files, as well as clickable links to images, PDFs, websites or call-to-action landing pages for sales follow-up.It brings the full power of internet sales to real estate.
7. Affordable and Cost-Effective Virtual models such as the Pix QuickTour typically cost the same or less than traditional renderings done for a property. What’s more is that renderings can easily and quickly be captured from a VR model. Why pay just for static drawings when you can get all the effectiveness and benefits of a VR model with unlimited renderings for the same price or less?
To further reinforce the effectiveness of VR models, here are some remarkable facts on virtual tours quantified before the pandemic:
Two-thirds of people want more mobile virtual tours
Virtual tours engage people 5-10X longer
Virtual tours double the interest in a property
Among those 18 to 34-years old, prospects are 130% more likely to base their initial decisions on virtual tours
Especially given the current circumstances, VR is a safe, convenient and affordable way to conduct tours for existing and pre-construction properties. The ability to easily customize the virtual space for each prospect, with nominal cost and effort, provides a way to help accelerate a transaction. Until the health restrictions are lifted, VR is an excellent way to compensate for the lack of activity surrounding sales and leasing. So much so that many users will realize that this technology will disrupt the way business is conducted even after the emergency has passed.
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