Are Drones a “Game Changer for the Real Estate Industry?”

Author: Kathy Satterfield

Interest Is Spiking Amidst Regulatory Uncertainty

Look! Up in the sky. It’s a bird; it’s a plane… It’s a drone!  Drones are the hottest technology trend of 2014, and you need look no further than Google to see that interest in drones has been dramatically rising:

The term “drone” and “unmanned aerial vehicles” or UAVs are used interchangeably to describe these gadgets that are flying the semi-friendly–as of yet largely unregulated–skies in pursuit of the perfect aerial photos and videos. Drones are making headlines as they hover over Hollywood film sets, celebrity weddings and professional sporting events. Others are being used to track wildfires, survey farmland, monitor wildlife, inspect bridges, plan disaster relief, search and rescue, emergency responses, volcanic activity and river temperatures. And believe it or not, drones may soon be delivering your Amazon order in less than 30 minutes! The FAA predicted that as many as 10,000 commercial drones will be licensed by 2018. What might this mean for the property assessment industry?

Excitement Over Commercial Drone Use Is Spiking

Historically, the military has been the biggest user and purchaser of drones, but commercial drones are generating excitement in a wide range of industrial sectors, including real estate. Drones have been used in both the U.S. and Canadian real estate markets for more than a year. Everyone from concerned citizens and commercial realtors to environmental consulting firms and financial institutions are eagerly eyeing the technology—streaming video, infrared sensors and swiveling cameras—and evaluating the myriad possibilities.


“Game Changer for the Real Estate Industry”

The main obstacle holding back the use of drones in the business world is the Federal Aviation Administration (FAA), which is struggling to catch up with this exciting technology. In June 2014, the FAA issued comments clarifying the permitted use of drones for commercial purposes and specifically named real estate as a prohibited use. Congress has asked the FAA to come up with a plan for the safe integration of drone use by Sept. 20, 2015. After that, commercial drone use could skyrocket. Countries that currently provide commercial permits for drone use include Canada, Australia, Japan and the United Kingdom. In these places, drones are being used to fly over properties to get a quick snapshot of anything that could be problematic for a real estate deal. The U.S. is still catching up with this innovative technology and a growing number of environmental firms are excited about the potential.

One application being studied at Wake Forest University demonstrates how effective drones can be in assessing pollution and providing key data about it (see shaded text box). In West Des Moines, commercial brokerage NAI Optimum offers its clients frequently updated videos filmed by a drone; in this way, they are able to stay on top of progress in developments. Although the company is ahead of other commercial brokerages by using a drone, it is likely that unmanned aerial vehicles will invade the industry in the very near future, especially as rules and regulations become clearer.

The National Association of Realtors is actively lobbying the FAA to permit commercial use of UAVs for collecting parcel visuals and marketing properties. Late last month, the NAR president sent comments to the FAA director, stating that: “The potential of using UAV technology to collect images is a game-changer for the real estate industry.”


It is not a stretch to say that UAVs will have a significant impact across a wide variety of industries once regulations catch up with technology. A number of national environmental due diligence firms aren’t waiting and have already invested in entire fleets of drones even in advance of the FAA regulations. And more importantly, they are building the expertise necessary to fly them effectively and download images for use in Phase I ESA reports, in advance of the competition. A recent Wired magazine article illustrates just how fast this technology is progressing. One recent enhancement puts drone on a wristwatch be dispatched with the flick of a wrist. Another recent development is a drone that can follow you on a property visit using a signal from a programmable tracker.

Technological advances are playing an ever-increasing role in property assessments, and drones are no exception. As noted by EDR Insight’s Dianne Crocker last month in Bloomberg BNA’s Daily Environment Report:

“The Phase I ESA industry is so uber-competitive right now that the firms that are succeeding are the ones open to adopting new technologies, taking them past the ‘wow!’ factor and putting them into practice. The ability to cheaply fly over a property and get data especially on sites that are inaccessible by foot can be a major selling point on some projects. Only a handful of firms have embraced it thus far, so the field is wide open, keeping an eye out for what the FAA does to regulate, of course.”

The use of drones in commercial real estate site assessments is cutting-edge and it is difficult to predict how its use as a tool for site inspections may progress but the impact could be significant. So watch closely to see how the FAA takes shape, and be sure to stay abreast of the latest technology in this rapidly developing, and promising, field. As EP James Whittington posted on LinkedIn recently: “The genie is out of the bottle. It is not going back in.”


Letter from the NAR to FAA September 2014 advocating the agency to allow drone use in real estate
– Bloomberg BNA, Article: Drone Use Could Be Boon to Site Assessments, But Legal Status Remains Hazy
– EDR Insight Article: One Firm’s Take on Drones and Landfills