Virtual Office Tours Gain Popularity as Brokers Try to Adjust to New Normal
Jordan Wade originally planned to spend the past few weeks zooming around the continent to Montreal, Sarasota, Florida, and Denver to join a client hunting for office space. Instead, the office broker is Zoom-calling from his Dallas home after clients canceled because of stay-at-home orders in the pandemic.
Rather than scrapping the tours, Wade works with landlords to set up tenant self-guided tours with an assist using the FaceTime app. Property owners unlock an office space at designated times for the tenant, who enters alone, but while on a FaceTime video call with both the tenant broker, in this case Wade, and a landlord representative. As the prospective tenant scrutinizes the space, the landlord rep can rattle off room specifications, give a sales pitch for the office and answer questions about whether gym memberships or other amenities are included.
"It gives the client the same experience as physically going into the space, which you can’t garner from a building flyer or floor plan," Wade, a tenant representative at Transwestern, said in an interview. "For the right client, it’s very well received and the landlords love it because it is keeping them busy and showing they still have activity in their buildings."
Virtual tours, normally an optional piece of the marketing budget, are getting more attention as landlords look to showcase properties in the era of social distancing to curb the spread of the coronavirus. Even as most deals are put on hold, some tenants are still scouting space out of necessity and landlords are taking this quiet period to beef up digital marketing.
Many companies are gearing up for what could be a prolonged period of social distancing where in-person tours could be untenable for many tenants. Companies that provide 3D virtual tours and high-tech photography are seeing a boost in business, with some reporting double-digit growth from commercial real estate clients. LoopNet, a commercial property marketplace that is part of CoStar Group, publisher of CoStar News, also offers 3D tours, drone photography of buildings and other services to market properties online. Brokers say such virtual offerings could mean lasting changes in how space is shown after the pandemic passes.
"You're going to see a lot more owners shifting to digital tours over the course of the next several months," said Ryan Barbles, managing director at Stream Realty Partners. Social distancing has created "tremendous buzz" around virtual tours that could change tenants' expectations for touring space in the long run, Barbles said.
With a coronavirus vaccine still 12 to 18 months away, some social distancing guidelines are likely to linger even if stay-at-home orders are lifted, which could prompt more owners to rely on digital marketing.
One Marketing Option
Barbles is building out professional virtual tours as a component of the marketing package for an office tower at 1800 Bering Drive near Houston’s Uptown-Galleria area, and that the same owner is already looking into adding professional virtual tours to its other properties.
Companies may keep using virtual tours as part of the marketing of their properties for lease and sale after stay-at-home orders and travel restrictions are lifted if the quality of the video tours is good, said Steve Barnes, owner of Barnes Creative Studio in Atlanta.
"Once travel resumes, no one is going to want to get on a plane right away for a first look at a $600 million development in Los Angeles, New York or Atlanta when they can get a great sense of it virtually," said Barnes, who makes drone videos of commercial property.
Casey Flannery, a landlord representative in Memphis, Tennessee, said she’s always favored in-person interactions but recently canceled some in-person building tours as a precaution. Instead, she’s making iPhone walk-through videos of the offices, and wiping with Lysol as she goes.
After the pandemic, "there will be more interest or likelihood to implement the tech tours into marketing, but I think it’s a supplement because looking at a video doesn’t give you a feel for the actual location,” said Flannery, senior associate at Commercial Advisors, a subsidiary of Cushman & Wakefield.
Some high-tech photography companies are out to change that perception.
Matterport, a data and photography company that creates 3D virtual tours of properties, has seen interest from commercial real estate clients "take off" in the past month since various stay-at-home orders took effect, RJ Pittman, the company's CEO, said in an interview.
Pittman said his company is seeing "meaningful double digit" growth in business interest from the commercial real estate sector in recent weeks.
"It’s been a wake-up call" for the commercial real estate industry, Pittman said. WeWork, JLL, CBRE, CoStar Group, the owner of CoStar News, and other large commercial real estate firms already were clients, but many are boosting their investments and other new firms are investing in Matterport services.
Signs of More Demand
WeWork routinely has had smaller coworking members sign up without seeing spaces in person and relying exclusively on Matteport tours, said Robin Daniels, a former chief marketing officer at WeWork who recently joined Matterport as its new chief marketing officer. Larger clients requiring bigger spaces typically wanted to see the space in person, Daniels noted, but that could change under various social distancing restrictions.
Other virtual tour companies and drone-photographers say they’re seeing a spike in sales since various stay-home orders took effect. A Chicago 3D virtual tour company, LCP360, said it saw a sevenfold increase in sales during March. Apartment customers are leading the sales boost including Apartments.com, which is owned by CoStar Group, but other commercial and office owners are also increasingly interested in LCP360’s products.
"We've been experiencing an absolute surge in new clients and existing clients are coming to us to shoot the remainder of their portfolio," Tom Lisak, senior vice president of sales at LCP360, said in an interview.
Some big firms that already had existing digital platforms are seeing more interest from office brokers, property managers and marketing specialists asking about how to get on board with virtual tours. Damian Davila, senior marketing specialist in Hawaii at CBRE, said he received 26 emails from different professionals asking about virtual tours in just the first few days social distancing mandates took effect. Davila said more of his peers are interested in learning about CBRE's digital marketing options, which include proprietary software for 3D visualizations and "test-fitting" spaces.
Other than high-end professional tours, there are plenty of free or low-cost options that are a step above a shaky iPhone video.
"A lot of brokers are using phones on a gimbal [a type of hand-held tripod], walking the space and doing a sales pitch for two minutes. It doesn’t have to be expensive or high tech. Frankly, the easier the better," said Greg May, executive vice president at Newmark Knight Frank in Newport, California.
May said overall there is a "very low demand for touring space right now" and everything except the most necessary deals are on hold during this period of uncertainty.
"Right now, the focus is on gathering information, making the right decisions and figuring out a long-term plan," May said in an interview. But "I think once we get back to normal, we’re all going to be looking at how we can always have access to seeing spaces online.”
Of course, virtual tours will always have their limits. Any executives responsible for renting an office for their company aren't likely to base such an important decision without seeing the site in person. That's why some brokers talk about using virtual tools as only part of the process.
Even when deal volume picks up again and the pandemic subsides, some tenants may still rely on virtual tours to whittle down their options prior to conducting in-person tours, said Joe Bright, a senior associate with NAI Partners in Houston. The brokerage lately has been using Matterport plus a free tool called Google Earth Tour Builder so tenants can see the outside of buildings. He’s also using a tool called Prezi to easily allow tenants to view presentations.
"This [pandemic] is going to bring about new ways to do things. I’d be surprised if you see a lot of leases being signed without a person seeing the building, but maybe we can do things in more efficient ways," said Bright.
CoStar News reporter Tony Wilbert contributed to this article.
