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The Truth About Drones & Their Impact on Commercial Real Estate

From science fiction fantasies to my actual fingertips, drones have come a long way in a relatively short period of time.  Their future remains somewhat of a mystery; not with respect to the degree of their impending impact, but as to how they will impact our world moving forward.  Yes, that is a very bold claim, but I believe drones and their spin-offs will have a huge impact on business and behavior, with changes to commercial real estate a byproduct of such influences.

 

What are Drones?

We all know what drones are.  They are unmanned aircraft.  They deploy bombs and provide surveillance for the military; and for the hobbyist, they fly around and take pictures and videos of their neighbors. Let’s delve deeper.  Let’s change our perspective and think of drones as a flying robot.   If you break that down even further, you’ll see that flying robot technology can be broken down into two main parts: the physical side as well as the intelligent side.  The physical side is simply what you see, the frame, propellers, sensors, cameras, batteries, remote and all the hardware stored inside them.  All that technology has been around for decades.  The intelligent component is what is making drones intriguing and what will drive their impact on business and commercial real estate.  This intelligent side consists of cognitive abilities created by big data, tons of complex mathematical algorithms, and artificial intelligence (more on robots and AI in future posts).

 

 

Most people restrict their imagination with regards to drones because of legalities and restrictions.  I don’t want to delve on that topic because history shows us that when product or service creates overwhelming benefits to society and business, it has found for the most part, a way to be legalized (or not made illegal).  Think Uber, Airbnb, Vaccines.  There will be resistance, but let’s quickly think about just one proposed use, Amazon Prime Air. It’s easy to see how the delivery of small goods by drone, as opposed to delivery trucks, would decrease traffic, emissions, and automobile accidents.  Right now you can buy a $1,000 drone that is almost crash proof because it perceives its surroundings through infrared sensors.  I’m sure Amazon’s drones will be much safer than a truck driver!

 

A Little History

Drones have been used in Japan to fertilize crops since the 1990’s.  They have also been used in Australia, for some time, for aerial surveying and photography.  Their biggest impact at the moment lies in military use.  They are used to replace traditional aircraft for surveillance and combat missions.  They are much cheaper, less detectable, and carry out missions without risking the human life.   The graph below depicts the global drone market and predicts its size out to 2024.  Notably, military usage is and will be the largest component of the total drone market.  Take a look at the current and future drone market.

Current Drone Opportunities

In addition to usage by the military, drones are used for emergency and disaster management programs, law enforcement, surveillance, film production, construction, real estate and agriculture.  Listed below are a few of their current uses:

  • Discovery by archeologists
  • Delivery of vaccines and medical supplies to remote places in the 3rd world countries
  • To monitor poachers and wildlife in Africa
  • The AZ Bureau of Land Management monitors the effects of climate change on wildlife
  • Construction monitoring
  • Geographical surveying
  • Real estate photos and videos

 

My Experience with Drones

I have had a drone now for about eight months.  I use it recreationally as a hobbyist photographer and videographer.  On top of that I used it as a broker for marketing purposes.  I can pull my drone out of my trunk and in a few minutes I’ve got aerial photos and videos.  I’ve also used it to track the progress on a few developments.  Somewhere down the road I will use my drone for virtual tours.

 

Future Drone Usage

The global commercial drone market will take shape around a handful of industries: agriculture, energy, utilities, mining, construction, real estate, news media, and film production. Here are some tasks drones will fulfill in the near future:

  • Law enforcement- drones will replace helicopters for surveillance purposes
  • Wi-Fi- Mark Zuckerberg bought a solar powered drone company to expand Wi-Fi across the entire planet
  • Detection- Locating lost hikers with infrared cameras
  • Border Patrol- Controlling the border with Mexico
  • Delivery – We’ve all heard of Amazon Prime Air.  Eventually drones will be delivering products from e-commerce giants like Amazon, but they will also replace food delivery guys and gals.

  • Waiters- a company in Singapore is said to be building a drone that can serve food up to 4.4 lbs.  Using infrared sensors, it is capable of navigating around a busy restaurant.
  • Swimming Drones-  A company has already produced a drone capable of submerging itself in water and then popping out of the water and fly away.  Think about the possibilities for military usage as well as discovery and research.

 

The cognitive abilities of drones, created by sophisticated algorithms, are the main driver of increased drone functionality. Advancements in the ability for drones to perceive, understand, plan, and navigate in dynamic environments will help them thrive in the plethora of activities we’ve just described.

 

Subsequent Impact on Real Estate

Their most obvious use, for marketing purposes, will continue to grow.  More importantly however, is that any change to the way business, logistics, and/or shipping is done will ultimately have an impact on commercial real estate. E-commerce delivery will be a game changer.  We will see additional distribution centers in every major city by Amazon and other big e-retailers.  UPS, FedEx and the lovely Postal Service will downsize their traditional operations.  I’m sure several startups are looking to completely overhaul the current delivery model with drone technology as its primary delivery medium.  Why send a guy in a truck when a drone can do it faster, cheaper, and with fewer potential consequences.  To support drone operations we will see a need for landing and control centers located all over the place.  We will probably see small distribution centers located even in very suburban/residential areas.

 

I can see drone technology, couple with AI and robotic technology disrupting the construction process many years from now.  They will soon be building things, monitoring things, fixing things etc.  What lies ahead will be remarkable!

 

Greg Barrett
Greg Barrett
Greg Barrett is the founder and editor of CREentrepreneur.