Drones Do Due Diligence And More For CRE
Commercial real estate professionals, sometimes labeled resistant to change and slow to adopt new technologies, are driving the proliferation of drones, finding new applications for them and leveraging them to deliver budget-friendly, high-quality results.
Low-cost aerial drone photography and approach video is a game changer for CRE marketers looking to attract buyers, investors or tenants. It can be difficult for photographers to find the optimal vantage point from the ground, especially with large properties, and low-quality photos can undermine marketing efforts.
Fast-moving companies like Fundrise, a crowdfunding eREIT, have sensed the promise of the technology. Fundrise CEO Ben Miller became an early adopter and convert when testing out his friend’s company’s tech.
“I didn’t realize how much they could do,” Miller said in an interview with GlobeSt. “The images they produce are a combination of real-time Google satellite and street view.”
Miller said he plans to integrate drones into his due diligence process, especially when deals encompass multiple properties. EBI Consulting, which provides real estate and environmental risk management, due diligence, energy use management and engineering services, has also discovered the significant bottom-line benefits of drones.
Drones are inexpensive compared to the cost of sending an employee or contractor to conduct site reconnaissance. These savings are passed on to clients, EBI's Dan Spinogatti said.
“Having a strategic relationship with drone providers allows us to mobilize nationwide on very short notice for low cost," said EBI National Program Director for Equity and Special Services David Stewart, who is speaking at Bisnow's Gettin' Techy With It conference in Boston on Jan. 18. "Both of these factors are crucial to timely decision-making by our clients."
The quality of the visuals drones produce are superb and similar to what a technical expert can obtain with an arms-length exterior evaluation, Spinogatti said. This has prompted property marketing teams to upload the HD 4K video flyovers EBI provides to their websites.
“The adoption and use of new technology will help EBI be of increased service to our customers now and in the future," Spinogatti said. "As the saying goes in real estate, ‘time is of the essence,' and technology is a great solution to the timing demands our customers face."
Best Drone Services CEO Harvey Malkin, who partners with EBI, said his five-option menu encompassing visual and infrared thermal imaging-enabled facade and roof analyses is more comprehensive than conventional due diligence. Drones can fly to vantage points that are inaccessible to humans or would pose serious risk of injury.
“Drones present another clever new tool for analyzing real estate,” QuietStream Financial CEO Robert Finlay said.
The use of drones to conduct due diligence is still constrained by limited functionality, as they cannot tap, touch or pry building elements like humans.
"Nothing replaces boots on the ground for due diligence,” Finlay said.
Although the Federal Aviation Administration recently loosened its regulations, its Small Unmanned Aircraft Systems Rule Part 107 still prevents drones from flying over people for safety reasons. The FAA stipulates daylight-only operation, requires users have a remote pilot certificate and caps maximum altitude at 400 feet (except near tall buildings). Exemptions to these rules are sometimes granted, and as drone use becomes more widespread, they may be relaxed, Stewart said.
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