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Tuesday, February 20, 2018

How to Use Virtual Reality to Engage Commercial Real Estate Tenants



By Rodney McDonald (Toronto)

Want to show your tenants what their future space will look like? Virtual Reality is an excellent tool to do just that.

For the past 35 years designers have shared their ideas for space with our clients using two-dimensional computer renderings. For over three decades, these renderings have been the best way to convey the design being considered. In our work with our client Royal and Sun Alliance Insurance Company of Canada (RSA), Avison Young, took it to the next level by using Virtual Reality (VR).
Avison Young represented RSA as the tenant for a 175,000 square foot lease in a new building at 2 Prologis Boulevard in Mississauga, Ontario to house RSA’s operations. Avison Young is also project managing the design, build-out and move into the new office space for RSA. The new office space features lots of natural light, no private offices and low height workstations, and will be LEED certified - it is a modern departure from RSA’s current Mississauga office space and a change for RSA employees.

During the design process and before the physical build-out we needed to convey the design to RSA’s executives. We also needed a tool to help RSA’s Mississauga employees experience the new space and start becoming comfortable with the change prior to the move. Avison Young proposed using VR to meet both objectives, and as a way to engage RSA employees in voting on two options for design finishes in key spaces.

After RSA endorsed the VR idea, to implement the innovation Avison Young took a number of simple steps using tools we all have - telephone and email:
  1. We telephoned a rendering firm (Norm Li) for a VR quote. Norm Li asked us how many VR renderings we wanted, what spaces we wanted in VR and if we needed the hardware (this was our first time using VR, so yes, we needed the hardware too).
  2. We received Norm Li’s quote by email and forwarded it to RSA for approval (RSA paid for the renderings and Avison Young paid for the hardware - two VR headsets and two mobile phones to attach to the headsets).
  3. RSA returned the signed quote by email, which we forwarded to Norm Li.
  4. Once Norm Li was formally engaged, we connected Norm Li to the designer (Bennett Deign) so Bennett Design could email Norm Li the two dimensional renderings of the new RSA office space.
  5. Norm Li turned the two dimensional renderings into VR and delivered the hardware with the renderings loaded onto the hardware to Avison Young’s office.
If you have not experienced VR, you must.

When the package arrived from Norm Li I put the goggles (headset) on immediately. I was transported inside RSA’s new office space and amazed. VR is a completely immersive experience and blocks out the physical world around you. It’s perfect for conveying an experience of commercial real estate that does not yet exist in our physical world.

First, we presented the VR experience to RSA’s internal project team. They loved it! Next, we presented the VR to RSA’s two executive project sponsors. Both executives put the goggles on simultaneously and we provided verbal instructions to help them navigate through the various spaces. It was interesting and exciting for them to experience the proposed space. Lastly, we scheduled two days for RSA’s Mississauga employees to experience their new office space in VR. These two days were one component of our overall change management strategy and plan. We set up a room with a display of the two dimensional renderings, samples of the finishes, and a VR station. Using a new technology tool created excitement about the future office space for employees. VR also helped with the voting process for different finishes. VR was a hit with the employees and generated a lot of discussion and excitement about the future office space.

This example shows how Virtual Reality can be an excellent tool to help your tenants experience what their future office space will look like. The future of commercial real estate is here!

(Rodney McDonald is a Principal of Avison Young and Practice Leader of Consulting and Project Management Services in Ontario.)

Wednesday, February 7, 2018

Houston is Prime Location, but not for Amazon

By Rand Stephens (Houston)

Earlier this month, Amazon released their list of 20 cities for its second headquarters (HQ2) and Houston was not among them. Should we be concerned that the 5th largest company in the U.S. will not be seeking 8 million square feet of Class A office space and providing potentially 50,000 jobs to the Houston area? Or, are we primed for an economic boost despite Amazon’s dismissal?

From business reporters and columnists to commercial real estate heavy hitters and economic development organizations -  they have all been weighing in on why Houston did not make Amazon’s HQ2 short list. Most point to lack of mass transit infrastructure, technology talent, and incentives. Hurricane Harvey did not help our bid either.

Energy, finance and technology are just a few of the strongest driving forces of the U.S. economy. As the energy capital of the world, Houston has always attracted Fortune 500 companies in the oil and gas industry such as Phillips 66, Halliburton and Marathon Oil. In fact, there are 25 Fortune 500 companies headquartered in Houston. Healthcare has also been an emerging economic driver and Houston is home to the largest medical center of the world, the Texas Medical Center (TMC).

The TMC may be Houston’s best kept economic secret despite being home to the world’s largest children’s hospital and the world’s largest cancer hospital. Healthcare is the fastest growing industry and has more potential for growth.  It averages about 10,000 open positions throughout the year. And, we are not talking about just nursing jobs, where there is currently a shortage, but also technical jobs in research and development and education. 

Currently, the TMC has $3 billion in construction projects underway and more to come. By uniting the collective renowned hospitals, public health organizations, universities, medical, dental and pharmacy schools and academic and research institutions, the TMC is poised to transform health, education and research needs of Texas and the world. And, it’s all taking place right here in Houston.

The Houston technology labor market’s primary focus is energy and healthcare, perhaps a labor market that Amazon is not willing to compete with, and that’s okay. Ultimately, Amazon may not have felt at home here, but the outlook for Houston remains positive. If 2017 showed us anything, it’s resilience.

(Rand Stephens is a Principal of Avison Young and Managing Director of the company’s Houston office.)
  

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