How Augmented Reality Will Change Real Estate

Derek Hsiang | 10 Mar 2023

BEHAVIOUR CHANGING TECHNOLOGY

In my lifetime, there are a few standout technology products that felt magical when I first used them. And beyond the wow factor, each of these products fundamentally changed my daily behavior. They made me feel like the world had just taken a large step towards something bigger than the technology itself.?

HERE IS MY TOP-10 LIST

Entire ecosystems would form around these products. You can probably guess when I was born from this list:

1.??Going straight from DOS to Windows 95. For some reason I just never used Windows 3.1.

2.??Receiving my first email.

3.??Free calls through the internet.

4.??Discovering how much faster and relevant Google Search was.

5.??Staring at my parents’ home on Google Earth.

6.??The iPod’s scrollwheel.

7.??Zooming, scrolling, rotating, and typing on the iPhone.

8.??Having really bad conversations with Alexa. And then making her control my lights. Later I made Alexa talk to Google Home.

9.??Riding in a Tesla Model S for the first time.

10.?Having really good conversations with ChatGPT. And then making it write code for me.

As I write this article, I’ve realized that I typically reside on the early side of the technology adoption curve because I’m always chasing that magical high.

There were a few products that had the wow factor but ended up being simply amusements. Like playing Wii Sports for the first time. Or exploring virtual places on the Meta Quest 2 (more on that later).

But most of the time, new technology products would fall well short of expectations. There’s too many to list, but it’s worth mentioning that I was a Glasshole for precisely one week before I returned it.

Right now I’m very much captivated by Large Language Models like ChatGPT. I find myself increasingly annoyed by sifting through Google results because ChatGPT gives such a direct, ad-free answer. My behavior is fundamentally changing again.

But this article isn’t about LLM or AI. I think there’s another magical milestone coming very soon, and it feels like a treat to get back-to-back milestones within a year of each other.

AN AUGUMENTED REALITY MILESTONE IS COMING

So here’s my big technology prediction for 2023: Augmented Reality (AR) will drive one of the largest technological leaps forward in real estate. Actually, I think AR will drive a huge technological leap forward in general, and real estate will, for once, come along for the ride.

AR has the potential to solve one of the strangest social behaviors in human history: looking down at our phones. Because AR headsets have the potential to overlay useful information and images onto whatever we're looking at in real time. It will eventually get so good that we'll question a lot of what we see and hear.

AR WILL BRING BEHAVIORAL CHANGE

Let me give you a real example of my scatterbrained behavior on a construction site:

I once had to solve a layout issue with my GC since a measurement on the as-built plan was off by a few critical inches. So I looked down at my phone, where I was greeted by 5 notifications. I read them all and responded to some messages. And then I got sucked into social media. I wasted 10 minutes doomscrolling on LinkedIn and hit like on a few posts. Satiated, I looked back up and realized I originally opened my phone to find floor plans.

So I looked down again. Opened my email. Got distracted by a couple emails I forgot to respond to. Put a calendar notification up to respond to them later. But this time I remembered my mission- search for floor plans. So I found them in my emails and opened them. And then finally grabbed my contractor to huddle around my tiny phone screen. And we proceeded to compare the plans to the site.

Contrast that to a world where a slim form-factor AR headset is lightweight and comfortable to use over long periods. There will eventually be an app that can overlay a BIM model over what I'm actually looking at on site in real time. It could show measurements and highlight discrepancies as I'm looking at them. Meaning I could visualize the problem instantly. And maybe even tweak the floor plan as I'm standing there. Just this one function would be extremely powerful, and I'm just barely scratching the surface of what AR can do. I'll get to more real estate applications at the end.

HOW FAR OFF IS AR FROM GOING MAINSTREAM

All the underlying technology for a daily-use augmented reality headset exists today. GPU’s are plenty powerful on all our devices. Artificial intelligence and machine vision have now reached astonishing levels of sophistication.

We’ve come a really long way since Pokemon Go went viral in 2016. For example, De-aging someone on TikTok in real time on a phone is arguably better than the 2006 de-aging of Patrick Stewart and Ian McKellen in X-men: The Last Stand.

The underlying technology just hasn't been combined properly with must-have hardware yet. All my experiences with VR to date have been amusing at best. Virtual Boy made me wonder "Wow, nobody at Nintendo realized this was a bad idea?" Google Cardboard elicited a "Wow, I'm amazed this was created with a dollar's worth of materials." And Meta Quest 2 was legitimately mind blowing, but not a device I'd use for long periods or do any work on. None of them fundamentally changed my behavior.

But it feels like we’re so close to a breakthrough and I think Apple may pull it off later this year.

WHY NOW AND WHY APPLE?

In my opinion, Apple hasn’t released a disruptive device since the iPhone. But I remain optimistic that they will recapture some of that nostalgic Steve Jobs magic with their AR/VR headset later this year.

Well, as usual with new Apple product launches, a few tidbits have leaked about its features and design. Nobody but a handful of Apple employees really knows what it looks like and what it’ll do.

The scant details that have leaked so far seem to indicate that they’re filling some of the gaps between a headset being an amusement and a fundamental tool in day-to-day life. And Apple insiders have stated themselves that they are aiming for consumers to completely replace phones with mixed reality headsets.

So far the rumors are that the headset will be lighter than anything else out there, but will most likely look something like ski goggles. There may also be a separate battery pack you can wear on your hip to take the weight off of your head. The headset will be able to toggle between AR and VR with cameras both tracking eye movement and facing the exterior. In AR mode, the exterior cameras will pass-through the image of your surrounding environment.

While these hardware features sound like mere incremental improvements over existing headsets like the Meta Quest 2 and upcoming Quest Pro, Apple is building an entire realityOS around the experience. I have strong conviction that Apple will create some solid productivity tools that seamlessly extend MacOS to suck new AR/VR users into their new product line. And that will be ultimately what drives mainstream usage.

But if the Apple headset doesn’t immediately propel us to this future, we’ll still gradually get there. Apple has been quite public about how they are headed towards more normal looking AR glasses. And all the big tech companies will release ever shrinking headsets until we hit an inflection point where it makes sense to wear around for every day use. That will trigger an explosion in AR applications. Real estate will be no exception.

AR APPLICATIONS IN REAL ESTATE

Acquisitions

Every part of the real estate life cycle will be affected. I would love to see information pop up about a building as I’m staring at it. Whether it’s for sale. Last trade date. Pricing and rents of buildings all around it. A visualization of the buildable square footage. Zoning and suggested optimized massing studies. There’s so many directions this can go on the acquisitions side.

Pre-Development

And then in pre-development, as-built plans could be quickly digitized instead of having an architect measure by hand over a couple weeks. Integrated Projects has already shown me that they’re capable of creating digital twins in a day.

I could then visualize and iterate through lots of different layouts to develop my construction plans. This naturally segues into interior design. Seeing the actual size, layouts, and lighting of a space is so much easier than looking at a top down 2d drawing.

Inspections

And then there’s construction itself, which I touched on earlier. Aside from visualizing real time progress against plans on site, imagine if inspectors could use it during their final walkthroughs. And developers could probably do “practice runs” themselves to make sure they address all the issues so that they pass the first time with an inspector. Or maybe some cities will accept a digital report from an AR walkthrough conducted by the contractor and get rid of inspectors altogether. That would save so much critical path time at the end of a project.

Sales

And when a building is completed, AR and VR can of course be used for sales. We already see that today with Matterport and companies like Stageglass (my first client!). Stageglass creates interactive renderings of apartments or houses where you can change furniture in real time.

Maintenance

And later on in a buildings life cycle, AR headsets could be really useful in maintenance and diagnostics. Perhaps a super with a headset can look at faulty equipment and the headset will overlay model information, potential problem parts, where to order them, and who to call. Or maybe just overlay a YouTube video about how to fix the broken part. I’ll be publishing a few articles about maintenance very soon, so look out for them!

ENORMOUS POTENTIAL AHEAD

Overall, the potential for AR to change our every day behavior is enormous. And it will impact every part of the real estate life cycle for the better. There are so many possibilities, and I look forward to the creative applications that will emerge after we make this leap forward. ■

The Author

Derek Hsiang is an ex-ecommerce founder who side hustled as a strategy consultant before becoming a Proptech-forward commercial real estate developer. He now runs The Proptech Scout and is on a mission to accelerate Proptech adoption by finding best-in-class Proptech around the world. If you're a founder, join The Proptech Scout community by claiming your company listing in the directory for free!

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official position of Proptech Institute, including its directors, employees and affiliates.

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