The latest digital craze sweeping the globe happens to have significant commercial real estate implications.
Pokémon Go is a game that creates location value out of thin air. The game leads its players to roam the landscape in pursuit of digital characters, using smart phones and a technology technique called augmented reality (AR). Think of AR as digital hallucinations a game maker creates. The hallucinations aren’t real, but they nonetheless have physical positions in the real world – on a street corner, at a retail store, in a city park, etc. The people follow the characters and extra foot traffic results.
If you’re wondering what I mean by “location value”, refer to the classic “three rules of real estate” for the answer: location, location location. The value and performance of a commercial property is almost always deeply related to the desire of people to go to that property. AR, along with the software games or promotions it enables, is a completely new and very successful way to influence and build that desire. Because location value is core to commercial real estate, the economic implications of the game for the CRE industry could be staggering.
CBRE Market Flash is a Must-Read
The game works by luring players into locations they will not otherwise go. That’s both good news (for retailers especially) and bad news (for property managers responsible for common areas and security). CBRE’s most recent report on the phenomenon as it applies to commercial real estate is quite an eye-opener and a must-read to get a handle on the potential economic impacts behind all the fuss. From the market flash:
Consumers of commercial and residential property will soon benefit from emerging capabilities to visualize real estate virtually via mixed-reality offerings in tandem with parallel advances in personal media devices and underlying graphics technology.
The industrial market will have access to technology that will impact multiple elements of the supply chain. DHL and Ricoh recently carried out a successful augmented-reality pilot in a warehouse in the Netherlands that proved successful in enhancing time efficiency and error reduction.
The retail sector, already seeing an increase in foot traffic around Poké “stops” and “gyms,” is on the cutting edge of using augmented reality to engage its customer base, both online and in-store, so that customers are more informed about the products they buy.
Data centers, already a booming asset class, will benefit from the need for additional infrastructure, connectivity and storage capacity demanded by this evolution.
You can read the entire CBRE Market Flash “Pokemon. So? How will augmented technology impact commercial real estate?” at this link.
Remember: in this industry, it’s not about the Pokemon.
It’s all about the go.