November 17, 2017 | Written by: Neil Ungerleider
Categorized: New Thinking
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The CBRE Group is one of the world’s largest real estate groups, with more than $86 billion in assets. It’s also interested in something most people wouldn’t associate with real estate: Augmented Reality (AR) and Virtual Reality (VR). In 2016, CBRE joined investors such as News Corp to invest in Matterport, which makes technology to scan physical spaces and rebuild them in VR. Later in the year, CBRE acquired Floored, which makes 3D graphics products for real estate.
According to Matt Bell, Matterport’s co-founder and chief strategy officer, there’s a very good reason for the real estate industry to care about VR and AR: People like being able to visualize spaces which they either can’t visit or don’t exist yet in physical space. VR offers an easy way to do that.
“The VR industry continues to grow steadily, but the release of new low cost standalone VR headsets such as the Oculus Go next year will ease some of the existing barriers to adoption,” Bell tells IBM thinkLeaders. “That, coupled with the rapid expansion of WebVR, which allows users to access content without having to download a VR app, is going to be really helpful,” says Bell. “As for AR, one can just look to the release of the [Apple] ARKit as a sign of what is to come. AR could be used in a variety of ways, including virtually staging or remodeling a house, allowing potential homebuyers to see what a home would look like in various configurations.”
Matterport and Floored are two of the larger players in a field that also includes startups like RoOomy, Virtual Xperience, and Transported. All of these companies specialize in taking technology originally created for gaming or design and applying it to the world of real estate. Different companies occupy different niches: Virtual Xperience, for example, specializes in creating virtual walkthroughs of properties that are under construction, while RoOomy’s platform allows buyers, real estate agents, and others to see how a space would look with different furniture and design configurations.
Jeff Maurer, Virtual Xperience’s CEO, says the emotional impact of VR and AR can help sell properties. “The more you personalize, the more you connect,” Maurer says. “That moment of emotional connection is what sells real estate—when users can see their own lives in the space.” In Virtual Xperience’s case, that means creating 3D-rendered iterated images of properties that don’t exist yet, and in many cases are literal holes in the ground.
The company has an in-house production team that works with clients to visualize their property. Clients provide dimensions, PDF files, detailed finish schedules that include lists of materials used, and the production team then develops interactive VR visualizations for clients. Clients can walk through their future property, see depth and dimension, and even manipulate the furniture and materials used in different rooms in real time. Maurer says this leads to clients deciding to, for instance, change the orientation of a room in an under-construction property.
While Virtual Xperience works with under-construction properties, RoOomy helps clients visualize how their rooms would look with different design setups.
Pieter Aarts, RoOomy’s CEO, says the company’s technology is designed to turn photographs of rooms and furnishings into what he calls “virtual staging.” Staging, in real estate, is the art of preparing a property for showing to potential buyers; virtual staging dispenses with the IRL version of that to build a virtual property out of code and graphics libraries.
“Virtual staging is an alternative to traditional, physical home staging methods found commonly throughout open houses,” Aarts says. “Instead of home sellers and real estate agents being forced to rent home furnishing pieces to display in a space temporarily, they are able to digitally stage a home to cut down on costs, labor and time.” Another advantage of virtual staging, he says, is greater marketing opportunities for realtors—they can show different interior design schemes in a home to, for instance, baby boomer and millennial homebuyers.
There’s also innovation on the hardware front for VR in real estate. Matterport’s flagship products are cameras that collect visual and spatial data from indoor spaces and transform them into virtual renderings.
Matterport’s highest-end camera, the 3D Pro2, turns footage into 3D, VR, and floorplans alongside standard 2D photos.
Bell adds that “A homebuyer may want to tour a home two or three times before making a decision. With 3D tour technology, a homebuyer can do that without ever needing their agent since they can tour it as many times as they want while sitting at their desk. A lot of agents are also using it as a competitive advantage in hot markets where timing is everything.”
Most companies working in the VR real estate space are relatively platform-agnostic; content may be viewed on the Oculus Rift, HTC Vibe, Android or iPhone smartphones, or a host of other platforms. As of press time, no platform has a market dominant position in the industry. As for the great masses of users, they are most likely to encounter these VR and AR tools in another setting entirely: when shopping for furniture.
Earlier this year, Ikea released an AR app for the iPhone that lets users see how Ikea furniture would look in their homes. RoOomy’s parent company Loft, meanwhile, has provided 3D modeling infrastructure for AR for retailer Wayfair.
For startups, this is fertile territory thanks to the market involved: According to the National Association of Realtors, a trade group, 56% of millennial home buyers and 46% of Generation X home buyers found their homes via mobile devices. For both startups and real estate agents, VR is a huge opportunity to market properties—even before a potential buyer sets foot in a home.