- Coronavirus has put the spotlight on virtual adaptations to social distancing, with everything from nightclubs to classrooms to residential real estate tours taking place online.
- Virtual tools have been an essential part of the commercial office brokerage world for a few years, as they help brokers market properties and help tenants see what their future office could look like, and cost.
- Building Engines, a property management software company used by firms like Cushman & Wakefield and SL Green, announced Thursday that it has partnered with FastOffice, a virtual tour platform.
- Executives from leading brokerage companies have said that virtual tour technology is getting more well-deserved attention, but that tenants don’t feel comfortable inking deals without a physical tour.
- Visit Business Insider’s homepage for more stories.
Coronavirus lockdowns have been a boon for virtual life with everything from nightclubs to classrooms adapting their physical setting to a remote, digital world.
Real estate, the marketplace of real settings, would seem to be unsuited for this world, but real estate agents have already adapted.
Residential real estate agents have been using video tours to sell and rent properties, with some industry experts commenting that the focus on video will carry on long after the pandemic ends.
The commercial office world for its part has been moving towards virtual reality and remote tours with software that can turn an empty office into a three-dimensional mock-up of what a fully-furnished space would look like and cost.
Building Engines, a property management software company that works with more than 800 customers, including Cushman & Wakefield and SL Green, announced Thursday that it has set up a partnership with FastOffice, a virtual tour and design platform.
The partnership had been in the works before coronavirus, but the companies fast-tracked their partnership with the advent of social isolation.
Virtual touring tools, like FastOffice, are getting more attention than ever for the ways that the tools fit the challenges of a socially-distanced world. However, according to many of the largest brokerages that Business Insider talked to, they’re just as useful as they were before the crisis but it’s not common to close deals using the tech alone.
How virtual-reality tours work for real estate
Colin Graham, the CEO and cofounder of FastOffice, is an architect who has had a practice for 30 years, and developed the tool to speed up the due diligence phase of leasing.
“I would spend weeks working out a solution for a potential customer and client,” Graham said.
FastOffice instantaneously creates a white-box virtual space out of floorplans, allowing a user themselves, or a designer from FastOffice’s team, to create a full model of the office, down to the furniture. That model also instantly calculates the costs of any renovations or furniture purchases. The service was launched in May 2019.
Scott Sidman, executive vice president of business and corporate development at Building Engines, told Business Insider that the partnership had been in the works since long before social distancing became a household term. The partnership was proposed to bring more value to its RealAccess product, which consolidates a landlord’s floorplans together to provide a visual model of leasing information and leasable space.
The original focus of the partnership was to provide tenants a way to visualize what their space could look like. After coronavirus pandemic began to shut down almost all offices, Sidman said that the business saw an even greater potential for use.
He also said the tool could be useful for tenants that are now re-evaluating their densely-packed open floorplans as potential public health risks, and that the software could help them figure out how they can reconfigure existing space.
Graham said that FastOffice is planning to create a feature that incorporates social distancing requirements, allowing users to test their space for public health compliance.
Graham said that the company doesn’t usually see clients deciding to lease their space with only a virtual tour, but it has happened. He also said that many of the clients, like commercial brokers use the software on their own without consulting FastOffice’s design team, and they also may have used it to lease space without physical tours.
“We had one tenant sign a lease in the Sears Tower in Chicago,” Graham said. “The CEO simply couldn’t visit the space, but based on our technology, they went forward with the lease.”
An increasingly virtual world
The virtual and remote tour world is made up of three separate, but overlapping tools.
The first is software, like FastOffice, that allows tenants to see a 3D rendering of what the space could look like. The second is made up of professionally-recorded video tours and other marketing materials that gives potentially interested tenants the chance to see what the property might look like. The last is a live, remote tour, conducted by a real estate agent holding a stabilized-camera.
“The live tours give people the ability to ‘see’ the real space as part of the process,” Kevin Aussef, CBRE’s global COO of capital markets told Business Insider.
All three of these tools have been important parts of the commercial brokerage world for a few years.
“Candidly, it’s got to be part of your strategy,” said Jeff Eckert, head of JLL’s US office agency leasing business.
Scott Harper, senior vice president and managing director for Colliers’ San Francisco leasing practice, said that most deals are being delayed because of social distancing.
“Tenants are delaying for those deals that are out to sign,” Harper said. “They’re uncertain about what’s out there for them, and tenants are wondering if they can utilize this situation to retrade any rent terms.”
Harper, Eckert, and Aussef all agreed that these virtual tours have been a useful way to move deals forward, but they aren’t leading tenants to sign.
“A lease is not returnable, you’re not buying merchandise,” CBRE’s Aussef said.
Eckert said that leasing hasn’t stopped, though it may have slowed. For clients that need to sign leases, he said that virtual tours have been helpful to narrow down potential locations. As for the final decision maker, modified in-person tours remain the best option.
“For a number of cases, we’ve had follow up phone calls: ‘Hey, my tenant would like to come by your buildings, can you have the door open to the space?'”
Depending on municipal rules, if it is legal during current local laws to allow the clients to enter, landlords have opened up the space, and tenants have signed deals.