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4 Ways Drones Are Changing the Commercial Real Estate Industry

Since their first use in the mid-1800s, unmanned aerial vehicles have been utilized for security, photography, safety, and many other applications. However, warfare and military units worldwide are primarily responsible for drone technology advancements over time. You may be surprised to learn that the first unmanned drone tech ever used was in 1849 by the Austrian Navy. The Austrians used 200 incendiary balloons to capture Venice. By the early 1900s, the United States military was exploring drone tech for target practice.

Drone technology has come a long way since then. In the 1980s and ‘90s, the U.S. military heavily invested in drone technology. By the mid-90s, the U.S. had developed the infamous Predator program, the unmanned aerial vehicles with anti-tank missiles attached to their wings. Predator drones were heavily used in the wars in Afghanistan and Iraq, and they’re what most people picture when they think of military drones.

The Federal Aviation Administration issued the first commercial drone permit in 2006, paving the way for non-military uses of aerial drones. Corporations and government agencies quickly began testing drones for things like border patrol, disaster relief, and pipeline inspections. But, it wasn’t until Amazon announced it would use drones for delivery that the general in 2013 when the public started taking notice. The first FAA approved drone delivery that happened in the U.S. contained medical supplies and took place in 2015.

The drone industry has grown tremendously in recent years, as the FAA reports that in 2021, nearly 900,000 drones were registered in the U.S. alone. Commercial real estate has found exciting uses for drones, and since the tech has become more affordable, real estate professionals have used them more and more. Thirty-seven percent of real estate agents said drones were the most impactful technology they used in 2021, according to a report from the National Association of REALTORS®.

Most impactful emerging technologies

Cyber security34%
Virtual reality30%
Source: Realtors® Believe Drones

Drone technology helps commercial real estate teams in marketing, maintenance, construction and development, and other ways. Real estate professionals need to be aware of various regulations regarding drones, and, often, hiring companies that do the flying for them is best. But once the details and specifics are ironed out and drones are ready for take-off, benefits can be numerous.

Here are 4 ways drones are changing the commercial real estate industry:

If you got it, flaunt it

Before drones became more affordable, planes and helicopters took aerial images of commercial properties. Even for some deep-pocketed commercial real estate firms, the cost barriers to hiring a pilot, aerial photographer, and aircraft were sometimes out of reach. Drone tech now offers a safer, more precise, and much cheaper solution to gathering excellent aerial photos, videos, and even 360-degree panoramas for marketing a commercial property.

Commercial real estate agents use drones to show overhead site maps of a property with the imaging looking straight down. Drones can, of course, also take video and produce aerial video tours of commercial properties. Professionally produced drone footage can help create an emotional connection with a property that other media can not. Property types that use an emotional connection as a selling point, such as resorts and community-focused multifamily, are already very good at using these videos. Still, all real estate asset classes can benefit from them.

Aerial drone photography shows potential buyers more accurate and way cooler depictions of what properties look like than ground-level pictures. Better storytelling and slicker marketing help commercial real estate agents win more listings and sell more properties, and using drone photography and videography is one way to do it.

FAA and government regulations are major obstacles to getting commercial drones even more widely adopted. A good deal of commercial drone use, including in real estate, is still limited due to the lack of updated regulations from the FAA. The agency must still draft rules for how low and high drones can fly, which areas will be designated as “no-fly” zones, and how to prevent mid-air collisions. FAA and NASA are currently working on a low-level air traffic system, but it could be a while until they’re done. The Amazon executive in charge of the company’s drone delivery project, Gur Kimchi, voiced his impatience about the delays but said the drone air space regulations should be finished “in much less than ten years.”

Inspector gadgets

Drone photography makes commercial properties look better, and drones used in property management make sure real estate assets stay that way. Drone inspections are used in almost every industry that requires visual inspections for maintenance procedures. They collect visual data on property conditions, helping maintenance staff avoid having to place themselves in more dangerous situations.

In many instances, drone inspections can replace visual inspections by property management staff, as drone cameras replace inspectors’ eyes. Property managers collect and then review drone photographs and videos later in detail. Drones can inspect roofs, facades, and even internal  inspections, such as inside cooling towers. Most of these inspections would usually require maintenance staff to climb on ropes or maybe even build scaffolding. Drones are a safer inspection option.

Aerial drones go beyond routine visual inspections, too. For example, some property management teams equip drones with thermal cameras to identify building heat leaks. Thermal cameras can also be helpful in HVAC inspections, helping identify anomalies and even minor damage to HVAC units. But perhaps the most significant benefit of drone inspections is the efficiency and time savings. Aerial inspections with drones can be done much faster than manual inspections. And given the relatively low cost of drone inspections, many property management teams conduct checks more regularly, discovering potential maintenance problems faster and addressing them more quickly.

The facade of the historic Radio Wave building in the Madison Square North Historic District of Manhattan

The New York City Department of Buildings is one example of an agency exploring the use of drones for inspections and maintenance. The department released a report in late 2021 showing that the Façade Inspection and Safety Program could use aerial drones to inspect building facades. Currently, the city uses binoculars and cameras from streets or nearby roofs to carry out their inspections. Drones would help NYC inspectors get better vantage points for photos and stitch them together to create more detailed pictures of facades.

Like Google Earth, but better

Google Earth is a great tool that gives a 3D representation of tracts of land from satellite imagery. But aerial drones go above and beyond Google’s commercial real estate professionals program.

For example, some real estate firms use drones to create frequently updated geographical maps with accurate, high-resolution images. This can be helpful for land development and scouting sites for potential properties, as geo-mapping images can include boundary lines, flood zones, topographical contours, and more.

Some real estate firms use drones to create frequently updated geographical maps with accurate, high-resolution images. Aerial Drone Photography

The most common types of drone mapping are photogrammetry and LiDAR. Photogrammetry is the process of capturing high-resolution pictures to recreate survey areas. The images are processed and pieced together using software to create realistic and measurable 3D models of real locations and 2D maps. LiDAR sends pulses of light to the earth’s surface and measures the time it takes to reflect back. This technology is especially effective for identifying small objects during drone mapping like power lines. 

There’s also 2D orthomosaic mapping, a top-down map of a land survey site or asset. These maps are built by combining hundreds or even thousands of digital photos collected by an aerial drone. The high-resolution photographs provide detailed maps and pictures with real-world views, perfect for surveying potential building sites.

Eagleview is an example of a company that uses drone technology in many of its products to deliver high-resolution imagery. The company’s drones provide an accurate top-down view of entire counties with 360-degree images of every parcel and property. Polk County in Iowa, home to the state capital of Des Moines, has been utilizing the company’s aerial imagery since 2008 and recently started contracting annual flights. Officials say the angled imagery provides much more detail than simple top-down imagery, and 12 county departments are using the service. Drone and areal photography like Eagleview’s are popular with local governments, but they can be used just as easily and effectively by commercial real estate firms.

Construction companions

The construction side of real estate is increasing its deployment of drones, and the discovery of potential new uses happens daily. Large building construction projects are incredibly complex. With the unwanted addition of supply chain issues, labor shortages, and increased materials costs, drone technology has been a way for many construction firms to save money and increase efficiencies.

Like commercial real estate firms, construction firms have already jumped on the drone bandwagon. The construction industry is one of the fastest adopters of drone technology, as it saw a 239 percent increase in the use of drones in 2018, according to DroneDeploy, a cloud software provider for commercial drones. Drones provide complete images and videos of building sites within a few hours, enabling site managers to better manage construction progress instead of relying on incomplete data gathered on the ground level. These aerial images are visual aids during meetings with real estate firms and site managers during building projects.

Year over year drone adoption by industry

Real Estate118%
Source: 2018 Commercial Drone Industry Trends Report

Drone tech also significantly boosts safety during building projects, much like how it helps security for property management teams. Instead of climbing electric poles or working along busy highways, site managers fly a drone and inspect areas without putting employees at risk. “Drone mapping keeps everyone safer while obtaining great data,” said Nic Maroun, Senior MEP Project Engineer at McCarthy Building Companies, Inc. Maroun said his company uses drones daily at their building sites for verification, documentation, and site logistics planning. Like many construction firms, it has helped McCarthy mitigate safety risks and significantly boost efficiency and save time in completing building projects.

Ready for take-off

Residential real estate agents who use drones could see an increase in their listings as high as 73 percent and increases in deal closing as high as 68 percent, according to calculations done by RISMedia. It’s safe to say commercial real estate agents could see similar results. Purchasing a drone for real estate is not entirely cost-prohibitive, as some models range between $1,500 and $3,000. But flying aerial drones requires piloting skills and the proper use of onboard cameras and other technology.

Real estate professionals could do it themselves, but it may be best to hire a certified, adequately insured professional drone pilot until they get the hang of things. “To stay safe, it is important for new pilots to always stay in their comfort zone,” said Maroun of McCarthy Building Companies. “If possible, having an experienced drone pilot be a visual observer for a pilot’s first few flights is beneficial. Then, you can expand your reach once you have a few flights under your belt.”

There are drone regulations to keep in mind, too. It’s not as simple as buying a drone and being ready for lift-off. If real estate professionals use drones themselves, they must be commercially licensed or remote pilots, as the Federal Aviation Administration refers. Getting a license involves passing a written FAA examination covering airspace regulations and other things. 

Local restrictions can also prohibit drone flights anywhere from state parks to near or over state infrastructure. And local ordinances sometimes restrict where drones can and can’t launch in certain towns and cities. The FAA received 1,633 reports of drones flying in unauthorized airspace in 2020, and that number is expected to increase. At least 44 states have created drone laws since 2013, according to the National Conference of State Legislatures. There are also special insurance requirements specifically for using drones for business purposes. Some general liability coverage may apply in case of drone accidents, but they may not cover it automatically. Some companies exist that are specific providers of drone liability insurance.

Drones for business are taking off, quite literally. Though aerial drones started as a military technology, recent data shows they’re making massive headway for commercial uses, including real estate. The FAA predicts the number of commercial drones in the U.S. to double by 2024, and the use of drones in commercial real estate is also expected to grow. The lack of FAA regulations has stalled commercial drone use, but many experts believe more comprehensive drone airspace traffic rules are on the way. Once those rules are in place, commercial drone use could explode. This is great news for real estate firms who have used drones for a while or are maybe just discovering their potential. Drones aren’t just for the military anymore, and some real estate firms may not be able to do without them one day.

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