Does Your Real Estate Have a Digital Twin?
Innovation is the mother of necessity. Some of the world’s most successful entrepreneurs built their companies to offer a product or service they couldn’t find elsewhere. It also implies that you need subject matter expertise in a particular domain before you can successfully sell to it. Today, we’re going to talk about a startup that is developing a way to create digital twins for commercial real estate properties and beyond.
Founded in 2015, Silicon Valley startup REscan has raised $6 million in funding so far to develop a full-stack solution that allows them to create a digital twin of any indoor space. It all starts with capturing the data, processing it to remove any sensitive information, then making it accessible and searchable. In order to better understand the value proposition, we sat down to speak with the two co-founders of REscan, Chief Executive Officer, Robert Herman, and Chief Product Officer, Botond Bognar. Both men have something in common – extensive experience in commercial real estate and a problem they encountered that hadn’t been solved yet.
You wouldn’t purchase a home without setting foot in it, and people who dabble in commercial properties are no different. Mr. Herman talked about how a career in commercial real estate investing means non-stop travel to view properties. Investors want to know extensive detail about spaces before purchasing them. Even more so, the people that occupy them. For example, the proximity to other more popular commercial spaces like an Apple store is quite relevant. How viewable is a potential storefront when exiting an Apple store? These are the sorts of obscure questions that can only be answered by visiting a property. And it’s not just investors that need these types of questions answered. In the world of commercial real estate, there are somewhere around 26 different verticals that have a need to view properties – brokers, property managers, lenders, tenants, the list goes on.
The founders of REscan looked high and low for a solution that would allow them to view commercial properties remotely. While Google mastered mapping the world’s streets, what they offer for indoor spaces doesn’t go much beyond 360-degree images. Even larger companies like Esri that sell geographic information solutions don’t offer a mapping service for commercial properties that goes beyond the front door. Since they couldn’t find any solutions in the market, they decided to build one. Rather than trying to reinvent the wheel, they went scouting to find some intellectual property around mapping indoor spaces.
The Technology Behind REscan
Indoor mapping is relatively new compared to outdoor mapping and brings along its own set of challenges. You need to capture video that is optimized to be viewed at the height of a human head. The configuration of spaces changes very quickly, not to mention how different lighting can affect data captures. White walls commonly encountered in offices present a unique challenge as they can trick sensors. Surfaces are even trickier. That’s why the two founders approached SRI International for a technology solution.
SRI stands for “Stanford Research Institute,” and it’s a non-profit scientific research institute that helps commercialize technology, some of which we touched on in last year’s piece on The Future of Medical Imaging and Machine Learning. Turns out that SRI had already done some work on indoor mapping for the Department of Defense and had a technology solution that would fit the bill. REscan hired them to do a workshop on a million-square-foot property and SRI liked the idea. After a successful pilot, REscan licensed significant intellectual property – 1.5 million lines of code and 14 patents – and SRI became not only their technology partner but an investor as well. The end result is this futuristic-looking helmet and loads of software that makes the magic happen.
The 3D capturing device seen above uses both LiDAR and computer vision – when one capturing method fails, the other fills in. The eyeglasses allow the person wearing the helmet to see what’s being recorded and make sure they are no gaps in data collection. With technology in hand, REscan was now able to proceed to the most difficult step – capturing the data from commercial properties.
Capturing Indoor Spaces
Once you have a technology solution, mapping an indoor space may seem easy. Just hire a bunch of people to go walk around properties all day. The first problem you’ll run into is building access. You can’t just walk into commercial properties and start taking videos. Places like offices, warehouse, back office rooms, all have controlled access. If you wanted to map one office building, think of how many people you would need to ask for permission. This is where the founders’ background comes into play. They’re experienced real estate professionals who are well connected in an industry where connections really matter. Those connections have helped them establish partnerships with several real estate firms that control access to millions of square feet worth of indoor space just waiting to be mapped.
Once an indoor space is captured, REscan can then automatically remove any sensitive information such as people in the background. This 3D imagery can then be labeled and queried as you would anything else. You might be able to ask questions like “how many fire extinguishers are there in my warehouse,” or even “how much paint do I need to paint all the cabinets in the break rooms.” Being able to ask sophisticated questions is part of the REscan roadmap, but for now, just being able to view the data is valuable on its own.
REscan found that the best way to view indoor mapping data is by using the supercomputers we all carry around with us to post inane drivel on social media. You can download the REscan smartphone app here and try it for yourself.
Using the app, you can teleport around indoor spaces and explore them. If you’re an agent that sells commercial real estate, this might help reduce the number of viewings by screening out buyers who may encounter showstoppers just by using the app. There are countless use cases for viewing indoor 3D data, and commercial property is just the tip of the iceberg. Other companies have noticed this too.
Matterport vs. REscan
A few years ago we looked at Matterport, a company that was building 3D images of building interiors and targeting residential real estate initially. Since then, they’ve captured over 2 million spaces which they believe is the largest index of built spaces in the world. That database of images can be rendered in any way, smartphone, VR headset, desktop, AR headset, it doesn’t matter.
Where REscan will excel is the ability to just show up and walk around and capture in- and outdoor spaces up to 250,000 sq.ft. in every hour while Matterport’s tripod-based camera takes almost a minute to turn around capturing approx. 10-15ft radius. In addition, REscan targets commercial properties that would otherwise be inaccessible to people using Matterport solutions. Imagine trying to cold-call a commercial property manager and asking if someone wearing a funny-looking helmet could video every floor of their office building. Having roots in commercial real estate gives REscan an advantage over companies like Matterport, but there’s certainly enough total addressable market for multiple players.
In speaking with the founders of REscan, they reiterated time and again their frustrations in not being able to find a solution like the one they’ve developed. Today’s travel restrictions make their value proposition even more relevant. Even when normal travel resumes, people who work in the 26 different verticals of commercial real estate will still need a solution that lets them view a property without having to physically be there. Eventually, spaces will become searchable, quantifiable, and analyzable. Before Google, we had to do our research in libraries. Before REscan, we had to travel to learn about commercial properties.
Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Find out which ones in the Quantigence Dividend Growth Investing report freely available to Nanalyze Premium subscribers.