As discussed in another recent post, commercial real estate (“CRE”) will never be the same after COVID-19. Office spaces will be permanently redesigned with public health in mind, working from home will become more common, and real estate discovery processes will need to move online.
I will dive deeper into the first two issues in future posts but I am increasingly hearing about virtual tours and wanted to weigh in as one of the pioneers of the streetview experience as CEO of EveryScape and give you the benefit of over a dozen years of using virtual content to help decision making. While virtual tour offerings are increasingly impressive they are not well-positioned to meet the need of online real estate discovery that COVID and the “new normal” has accelerated. The issue of scalability of these solutions is often cited as a constraint for an industry of this scale; it is not my primary concern. The most important issue is simply that virtual tours lack people. More specifically, they are one-directional, i.e., information is passed from owners and brokers to the tenants, but not the other way around. This prevents prospective tenants from interacting with brokers and owners to quickly get responses to their questions. Virtual tours cannot fully replicate the value of experiencing a space collaboratively with other people, hampering the informed decision-making necessary in a post-COVID CRE world.
In reality, there is no perfect solution for tenants right now. In-person tours, while inefficient and perhaps even dangerous in today’s times, still deliver much more value versus current virtual tours. Tenants are forced to choose between two far-from-perfect options: inefficient but valuable in-person tours, or efficient but less valuable virtual tours. To quickly change tenant behavior and sustain decision-making in CRE, we need to offer tenants an efficient and valuable virtual experience. To do this, we need to develop and deliver the right virtual collaboration platform, designed specifically for the needs of the industry...
What does this “right” virtual collaboration platform look like? It will need to do for places what video-conferencing has done for faces. It will need to provide tenants with the ability to experience places with other people, together in real-time, and then let them experience it again on their own time, and then again with another group of people just as they would in a series of in-person experiences. Further these experiences must be stored in one simple location with all the relevant information easily accessible to aid in their decision-making.
This single-location, collaboration-driven approach to all the information a tenant may need to make and justify a decision is the new best-in-class experience. It brings together efficiency (i.e, on-demand viewing, no scheduling headaches, document management) with value (i.e., experience places together, ask questions and get answers in real-time, truly be in the space). Such an experience will pave the way for the digital revolution that the CRE industry desperately needs to thrive post-COVID.
In closing, CRE is in dire need of value-added virtual solutions for the “new normal” and beyond. Rich Barton, CEO of Zillow said it best, “The virtual tools home shoppers need for safety today will become their expectations for convenience tomorrow.", but we can't underestimate the impact other people have in our own decision making. For this reason, current virtual tours are not effective at driving decisions and thus will not meaningfully change tenant behavior. Going forward, platforms will need to bring both the people and the content together either by enhancing existing virtual tour offerings or by creating net-new immersive experiences. Finally, brokers and owners alike must fully embrace these platforms or risk being left behind. No one could have reasonably predicted COVID-19 but now we know and whether it's a second wave or our clients just expect us to do more with less of their time, we need to embrace collaboration technologies that enable us to have virtual experiences that are both efficient and effective.
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