Part 1 of 2: REIT Organizations Win with Drone Flight Services – Rese Cleaver
Since the launch of DroneUp’s new podcast, REITs with Rese, we’ve had family, friends, and old colleagues reach out and ask, “A podcast about Real Estate Investment Trusts? Aren’t you guys a drone solutions company? How do drones relate to REITs?” Today we clarify this curiosity and walk through each business area to explain, “what are drones used for?” in that area. This is a two-parter. The following post will give the bonus of outlining REIT organizations’ roles for the most significant wins through drone operations.
To set the stage for this to sink in, let’s first break down the operations types within a REIT.
REIT organizations generally revolve around one or more of four business areas:
- New Development;
- Mergers and acquisitions;
- Property management; and
- Let’s call the fourth bucket “innovations.”
Drone Operations – Line of Business Breakdown
New development primarily revolves around construction projects and potentially land acquisition. Fun fact – construction was one of the earliest commercial adopters of drones as part of the PropTech portfolio. In a new development, drones are used for surveying, project monitoring, and progress tracking, stockpile consumption tracking – just to name a few examples. Business Insider explains the leading factor for the early construction drones implementation into operations is the improved ability to adhere to workers’ safety regulations.
Looking at the mergers and acquisitions area, we all heard stories during the COVID-19 quarantine of 2020 about properties purchased site-unseen. How was this possible?! Well, in short – drones. Drones can capture high-fidelity, geometrically accurate visuals of the entire property – regardless of the size. These are used for marketing purposes and are liquid gold to buyers. They are handy for commercial loan approvals as well. Loan officers and banking leaders use other drone data as part of a loan evaluation, including remote visual survey imagery and 3-D models of structural assets and buildings.
Property management is also getting an incredible amount of value from remote visual surveys, such as drone roof inspections and commercial building inspections. This operational model has become a regular part of maintenance and operations initially due to COVID-19 and social distancing, but is here to stay due to the efficiency and effectiveness. This is another area where drone adoption is rapidly growing due to regulatory requirements, including workers’ safety – conducting visual inspections with a drone is much safer than a person operating at heights from a ladder or scaffold. The added benefit of the captured built inspection data is also available from any location once uploaded to digital inspection platforms. It becomes part of the property’s portfolio, accessible before conducting the following assessment for critical context.
The last bucket is “innovations” because novel approaches to solving business operation problems with drones consistently evolve. At DroneUp, we consistently have discussions with organizations and industry partners that reveal new use cases addressed with drone flight services. This was undoubtedly the case before the COVID-19 crisis; not to say it has stopped or slowed, but several innovative areas a year ago are now considered normal drone operations with REITs.
Despite being around for a couple of decades at this point, drones are still very much an emerging technology industry, as is the property technology (PropTech) industry.
Drone News Says: REITs Are the Beacon of Success
In sum, the real estate investment trusts (REIT) industry is one of the most relevant and proven areas of successful drone operation implementation. According to Levitate Capital, new development construction built inspection and real estate in the top 10 enterprise drone markets of 2020. That covers 3 of 4 areas of business. Are you becoming a believer yet?
In the same publication, Levitate Capital also mentions three areas that typically hinder the adoption and implementation of enterprise drone programs – technology barriers, regulatory uncertainty, and community acceptance. However, in this case, with the longevity of drone technology in REIT operations and regulation being a key driver in the tech usage in said operations, drones are here to stay in this industry. At this point, it is fair to say if you are a business leader in a REIT organization not yet using drone technology, you need to catch up.
Look around, take a breath and execute.
All that said, this places REIT organizations in 1 of 2 categories:
- Pack Leaders: These organizations recognized the signal to reorient and develop new muscle to survive economic shifts and regulatory burdens. They’ve responded to the call by embracing technology in data to serve their businesses in the same trustworthy and transparent manner people-driven activities once held. These organizations have excelled beyond previous performance benchmarks, improved compliance, and realized strategic initiatives more often due to the availability of high-quality and accurate information.
- Second-Handers: These organizations are operating extremely tactically and are struggling with each wave of economic uncertainty. Operating models are static, and business leaders continue to gain a holistic understanding of their current state of operations. More often than not, projects are dwindling, and those that persist are over budget and time.
If your organization falls short of Pack Leader status, there is still hope yet. Moreover, joining in on the PropTech revolution doesn’t require a heavy investment of capital or resources. Many REIT organizations are holding Pack Leader status using drone service providers to conduct their drone operations. This approach may be the lowest barrier to entry to achieving significant cost savings and freeing capacity for your resources. With a drone solutions provider, you can have just a single flight executed to receive these benefits, and no additional commitments required. This agile approach is low-risk, low-cost (low enough to use the company card and not deal with procurement), with tangible and high-value deliverables. And the deliverables of high-fidelity visual data you won’t be able to help but share with shareholders. You will be hooked.
Hopefully, by this point, you’ve deduced the answer to the original question — “Are drones relevant to REITs?” Yes, my friends, they are.
And, if you are still not convinced, tune into the coinciding podcast episode of REITs with Rese.