I love the idea of touring buildings virtually – it can narrow the list quickly and people from all over the world can be a part of it! However, in 35 years of CRE work I never once toured a client virtually. We would collect flyers with photos and floor plans and we’d get the occasional video or 3D floor plan, but those were rare. Enter Covid-all that changed in an hurry! Of course, there weren’t a lot of showings happening for several months and there are still fewer than what was considered normal prior to Covid.
I recently read a BisNow article that cast doubts about whether virtual touring would still be necessary after Covid. They said it will be a mixed bag. The people they interviewed making the technology for the virtual tours think it’s here to stay….of course. Those companies saw huge adoption and growth in 2020. And, in some ways, I don’t disagree. It seems like a new bar has been set. It used to be that still photos and floor plans were all that was expected. Now, a 3D floor plan allowing you to walk through the space on any computer in the world is the expectation. If a client can narrow the list of properties that they might have previously toured from 20 to 5, that saves money. Furthermore, they might only have local managers tour the properties in person avoiding a few people flying in from the corporate office. That saves airfare, hotels, rental cars and food. That can really add up. That said, there is no substitute for being there in person. And the cost is a rounding error. But the virtual tour might be good enough for out-of-towners. I think it will depend on the proximity of the decision makers and their priorities at the time. If they are based in DFW, in-person tours will still be the standard.
Virtual touring has been used in residential and multi-family for years now and those people are often local. I read that 85% of home buyers search houses online and tour them virtually before ever touring one in person. I do see the use of virtual tours continuing and growing in commercial, but never to the extent it’s used in residential. We used it here at REATA over the last year. When a client decided to sublease their space, we created the 3D or 360-degree floor plan and tour. We also had one client from the coast do a virtual tour where my smart phone was on a gimbal and the clients were watching through a Zoom connection. It was also nice because it was recorded so people who missed the tour could watch it later. The downside to that, however, is that we never had all the decision makers in one place at one time focused on the decision. It created a disjointed process that took longer than it might have had everyone been together in person.
So, while a virtual tour can definitely help to eliminate major issues, it definitely doesn’t encompass the feel. I’ve looked at homes online before that once I got to the actual premises it showed very differently. To quote the BisNow article, “I’ve definitely seen a lot of these videos, and basically, the only thing it helps me with is OK, you know, I can tell whether the space is a hellhole, but that’s about it”. And I don’t know that I disagree. A good photographer can make anything look good. I can’t imagine having a client make a final decision using only virtual tours without having someone tour it and shoot it with their own equipment. However, virtual still serves a purpose. While touring in person a client can whip out their phone and take pics and/or videos of things they liked or didn’t like to jog their memories later.
New technology developed during Covid specifically allows for this-we’ve been testing an app that replaces tour books and allows all participants to take photos and video and upload them to a common place on the app for that building. Everyone can then see what everyone else is thinking. This technology was developed in warp speed during Covid. It’s definitely not market-ready but it shows where things are headed and is further confirmation that virtual touring will be one tool that is here to stay. It just hasn’t played out in the market long enough for folks to get comfortable with their decisions one way or the other.
Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.