Since the recent Pokemon Go phenomenon, everyone has been writing about the relationship between augmented reality and commercial real estate. We were recently interviewed by CoStar News on how we see augmented reality helping (and hurting) various sectors of commercial real estate. Since I’m such a nerd about studying the multi-faceted relationship between technology, society, and the CRE industry, why not reclaim our expertise in a top 5 post?
Know the difference between AR and VR
I can’t stress enough how important it is to understand this. Let’s break it down real fast. Augmented reality blends virtual reality and real life. Developers or architects are able to draw or implement graphics through applications which project them into the real world. Virtual reality totally discounts real life visually as an entirely new world is projected to the user. See the difference? With AR, users have the ability to interact with virtual contents in real life and, unlike with VR, are able to distinguish between the two.
AR, Engagement, and Brick-and-Mortar
The purpose of Augmented Reality in retail is to help enhance the consumer’s in-store experience. Through distortion, AR helps consumer’s visualize more options while physically remaining in reality. We recently wrote about why Beauty is the second most prosperous retail sector. Spoiler: we credited it’s interactive nature. Brick-and-Mortar beauty stores like Ulta and Sephora (which are actually expanding in number) are able to capture consumer attention through the use of multiple senses (touch, smell, feel, sight), which draws us out of our homes and into stores. People want things to be interactive and shareable. As much as you’d like to call Millennials “passive” or “lazy,” it’s just not true.
In the Early Stages
AR helps investors visualize the end result of a property. It allows us to evaluate whether a project is feasible or not through GPS location and other AR applications. Developers are able to stand in an unfinished space and draw an outline (or use additional holograms) to help investors better visualize what they are really investing in. Lenders and investors are also able to use certain apps which incorporate AR and GPS location tags to view stats on buildings, tenants, vacancies, square footage, rent, etc.
Taking Over Industrial
Believe it or not, AR is already invading the industrial sector in a very big way. A huge plus to AR in the industrial space is the fact that it cuts the time of any job whether in the sectors of design, robotics, manufacturing or logistics. This technology can be used for transportation, administrative purposes, or even to control environmental factors and operations.
As I said before, AR is there to enhance our real-life experiences. Technology is a tool meant to make information more easily accessible, relieve us from relying on our memory and allotting us more time. Newer AR technologies like the Daqri Smart Helmet are programmed for object recognition, mapping and voice-recognition software to ease the logistics from the start of building to packaging to distribution and tracking such products. AR video can also be used on the customer service end between the customer and supplier to help better identify any possible issues with a product. Sure, we see hiccups in new technologies but as AR is used more frequently, things will come more easily.
More Efficient, More Power Needed
As for the physical aspect of industrial space, as for any heavily used technology, AR increases the demand for a strong and consistent power source. Many developers turn to older, abandoned industrial spaces that may not necessarily be able to sustain the power needed for various aspects of AR. Luckily, new construction is usually cheaper than rehabbing a property so investors and developers may be more keen on constructing new industrial sites from scratch which are able to sustain high power usage and relieve network performance issues. I’m not sure on how big a change in square footage will be but I can tell you that the decrease in the need for dozens of workers will allow for smaller space and although AR technologies have an initial high investment cost, they are money savers in the end.