Will Drone Technology Help Commercial Real Estate Soar?
By: Scott Randolph, Transwestern senior vice president, and Peter Marcin, Transwestern executive vice president
This photograph of the Hyatt Regency Chesapeake Bay Golf Resort, Marina and Spa was taken by a drone-mounted camera, at considerably less expense than aerial photography from a helicopter or airplane. Photo courtesy of Peter Marcin
When purchasing a car, the prospective buyer wants to inspect every inch of the vehicle before committing. Commercial real estate is no different; an investor looking to acquire a property would like to be able to see every inch of the building and identify all potential pitfalls. But this is easier said than done, particularly with large-scale, multistory properties.
Some Transwestern brokers have found that utilizing drone technology can help resolve this issue. Drones allow owners and prospective investors to view assets from an entirely new perspective. They can view real-time potential pitfalls facing the property while flying around it via a high-definition 1080p (1,080-pixel) video image.
Aerial photographs of the property not only shed light on potential issues facing a building; they also have a multitude of other uses. For instance, drones have enabled Transwestern brokers to showcase nearby amenities and walkability through aerial photos of projects in Rockville, Maryland. Brokers have even begun exploring using drones to photograph traffic patterns on major arteries near a project at different times during the day. At one property in Baltimore, after a tree branch fell on an inaccessible part of a building, a Transwestern broker photographed the damage using a drone the next morning, helping the owners to determine the exact extent of the damage. Drone technology also allows brokers, owners and building managers to view images of mechanical equipment or windows on higher floors if issues are reported.
While Transwestern does not use drones on a companywide scale, some individual brokers throughout the company use them at their own expense. Because of potential liability issues, it has become standard practice for brokers who use drones to carry a $1 million liability insurance policy through the Academy of Model Aeronautics, which has its own restrictions in place to ensure that pilots adhere to safety standards.
Drone software typically prevents users from flying in restricted airspace and limits flight height in certain areas. Some new software allows pilots to set a predetermined course and altitude, so they don’t actually fly the drone at all. Users can even connect an iPhone or wear innovative goggles to see what the camera is recording in real time.
So why hasn’t every broker and building owner embraced this new technology? There are a few reasons. While drones are much less expensive and more versatile than renting a helicopter to take aerial photographs, they still cost approximately $1,400 or more. Invariably, they do crash, into buildings and even rivers. The tradeoff is that the technology and camera capabilities are advancing so quickly that replacing a downed drone isn’t always a huge hardship, since you might want to upgrade to a newer model anyway.
The biggest issue facing drone adoption, however, is a legal one. Currently, drone legislation simply does not exist; there are no federal regulatory limits to drone use. Anyone, even a child, can go to a hobby store and buy one, albeit a less sophisticated model than the ones described above. There is so much uncertainty regarding drones that most commercial real estate professionals are choosing not to make the investment until the Federal Aviation Administration (FAA) implements a formal policy based on yet-to-be enacted legislation.
Until targeted legislation is enacted that specifies allowable and prohibited uses, the FAA’s only option to deal with this new technology is to broadly interpret current legislation, which is virtually nonexistent. Therein lies the problem, as federal legislation on the books did not envision camera drones and says absolutely nothing about commercial drone use. The FAA is working to establish formal comprehensive guidelines regarding commercial drone use but, until that occurs, the debate on their commercial legality will continue. Many will rightly view this as a risk factor before investing in the technology.
As early adopters and current users of drone technology, we’re in favor of regulating and creating guidelines for commercial drone use, such as licensing drone pilots in order to keep dangerous drones out of the sky. Without any regulations, the potential for inexperienced operators to create hazardous conditions is much higher. In addition, without these regulations, the FAA does not have the framework necessary to differentiate between types of commercial uses and therefore must adopt an “all or nothing” policy regarding legality.
In the competitive world of commercial real estate, anything that sets a broker apart is as good as gold. We were happy to be early adopters, as this technology truly does create a “wow” factor in our business. We are fortunate to witness the birth of a new medium and are excited to see the technology continue to advance. All the industry needs now, quite simply, is to know that there are rules of the game, and innovation will follow.