Technology is streamlining so many aspects of housing these days and simultaneously reshaping the way we think about design, construction, and leasing. One of the most-promising technological breakthroughs, virtual reality (VR), is helping coordinate these three disciplines by connecting designers, project managers, and operations staff in all phases of the development process, not to mention the technology's power to attract prospective tenants during a project's lease-up period … all without requiring a physical office or model unit.
We spoke to three multifamily players about their experiences using VR in the lease-up process and how they plan to employ the technology in the future.
VR's Novelty Still Grabs Viewers
Having access to virtual tours is a huge benefit when a project is under construction, giving prospects a look at something that isn’t quite finished yet. Indeed, VR is an innovative, cool way to bring an apartment community to life, says Aaron Galvin, CEO and co-founder of Luxury Living Chicago.
“What’s most important about VR right now is not so much the content of what you're showing someone but the [fact] that 90% of the population has never done VR before,” Galvin says. “If you can be someone’s first VR experience, you can be very memorable.”
Brokers like Luxury Living Chicago are banking on that advantage. The agency has used virtual reality in a number of ways to capture new leases, the first of which occurred at 8 East Huron, a high-end boutique apartment property in the heart of downtown Chicago developed by CA Ventures. Because there wasn’t access to the property, Luxury Living partnered with a hotel across the street to set up a pre-leasing space. Prospects were able to see renderings of the amenity and community spaces, plus 3-D photos of the actual units, created with a Matterport camera.
Other developers, such as Bond Cos., are using VR in the same way, but with a stronger focus on showing amenities.
Damon Dance, Bond's executive vice president, says VR benefited the firm's 363-unit Spoke property, which offers floor-to-ceiling windows with generous views of Chicago. Bond relies on the virtual experience to bring to life for prospects some unusual amenities, such as a music/performance room with a mini stage and lounge, a soundproof jamming room, and an acre of outdoor space with a pool, cabanas, and grilling areas.
Jonathan McCullach, senior vice president of Chicago-based developer Belgravia Group, points out that VR can be used after a condo is purchased as well, to help new residents envision the space and plan for how they're going to outfit their new home.
VR and the Bottom Line
While every company wants to show a quantifiable ROI on its marketing spend, sometimes doing so is easier said than done. VR is one aspect of the multifaceted sales journey that can seal the deal.
Galvin credits virtual reality for more than a dozen high-end unit leases at 8 East Huron that Luxury Living otherwise would not have had the opportunity to capture because the actual units weren't finished.
Bond Cos. confirms the value VR can bring to the bottom line, noting that every single resident who has used its VR program has said the experience was positive. Tenants particularly like how they can view property amenities and the building environment without needing to tour actual spaces.
But what about people who might balk at having to put on goggles in order to see a plan or image gallery? Most people, according to developers, who say today’s renters feel comfortable moving forward with a lease after a VR experience.
“Surprisingly, everyone's been receptive to it,” says Galvin. “Obviously, younger, tech-savvy renters are going to be more game to throw on the goggles. However, every demographic has been open to it and excited to explore VR.”
Bond Cos. affirms prospects' receptivity to VR, despite agreeing that the younger crowd embraces it a little more than their older renter cohorts. “What our leasing staff hears most is how real it feels,” Dance says.
Belgravia Group's McCullach says the people who love VR most are the leasing and sales agents, who find the technology extremely useful to show clients what it would be like to live in a home in Belgravia's project at Renelle on the River.
“Once buyers try out the VR technology, they're intrigued and oftentimes visit the sales center a second and third time," says McCullach. “Each time they experience the technology, they pick up on details they hadn’t seen in previous test-drives. They become more familiar with the floor plans and views.”
Not a Virtual Cake Walk
Of course, as with any new technology, cost has to be a consideration in deciding which products to adopt and which to forgo. The three we spoke with are trying to quantify the effectiveness of VR in terms of how many leases it yields versus the cost of the VR equipment and software.
Because VR is still fairly new and hasn’t become mainstream yet, its cost is still relatively high. However, compared with the cost of leasing a commercial space to build a temporary model apartment unit, Galvin estimates it’s only about one-tenth the price. He warns, however, that it’s critical to truly and accurately display all the finishes that will appear in your units, down to the last details. Residents are paying attention and want the actual unit to be a true duplication of what they see with their VR goggles.
“You learn each time you do it,” Galvin says. “Our key [lesson] from working with VR is that if you have the opportunity to do VR, render the community spaces and use a 3-D camera to photograph actual units to represent the apartments.”
Dance says Bond Cos., also, is very careful not to misrepresent the end product. But that’s not the only challenge. Because VR is still so new, many people are uncomfortable with it or are unfamiliar with how to use it. Spending some time teaching novices how to operate and navigate the hardware and software can help.
Other Practical Uses
The virtual experience isn’t just for renting the apartments or selling condos: Bond also uses it during construction to identify changes or opportunities to make improvements. “It's been helpful to mitigate costs from changes that [usually] would come after final release and installation of materials and finishes,” says Dance.
Bond also uses VR as a website feature, integrating 360-degree views online of its Spoke project. Similarly, Luxury Living Chicago pegs the technology as a tool for both modeling apartments and choosing finishes.
“We've realized there's further potential, given the mobility of the system, and are planning some upcoming mobile tours around the city that will enable us to bring the building to prospective residents,” says Dance.
