Source: REX
Real Estate

Goldman Sachs Alum Turns to Virtual Reality to Sell $57 Million Mansion

The super-rich might not be early adopters, but their brokers are.

Standing in the living room of an oceanside $57.5 million home in Malibu, Calif., Jack Ryan, the founder of REX, an online brokerage, took in the view.

“The only way you can sell a house like this," he said, as the shimmer of the Pacific glinted off gleaming white lawn furniture outside, "is have them walk through it, either physically or virtually."

The Malibu mansion overlooks the Pacific Ocean.

The Malibu, Calif., mansion overlooks the Pacific Ocean.

Source: REX

Ryan, a former partner at Goldman Sachs and a onetime opponent of Barack Obama for the Illinois Senate seat, founded REX in 2015 as a low-priced competitor to traditional real estate brokers. According to Ryan, whose business plan involves targeted online ads and charges a fraction of the normal broker's fee, there’s an 80 percent chance that the buyer of an $800,000 home already lives within 15 miles of its location; still, as prices rise to levels only the super-rich can afford, that number plummets.

“For homes like this,” Ryan said, gesturing to the house’s fireplace, “there’s a 50 percent chance that the buyer is outside the U.S., in around 15 financial capitals—London, Shanghai, Paris, Beijing.”

To reach that elusive group of the super-rich, Ryan had to get creative, which is why he decided to pay Legend3D to map the house and create an interactive video.

“If someone’s in Moscow and sees a picture of this home, they say, ‘Eh, it's over in Malibu, all I see is this photo; I'm not enthused,” Ryan said. “But if we send them a 3D, fully immersive experience, they can really see the waves and get a feel for this house and say: 'it's perfect for me.'”

A view from the living room to the ocean.
A view from the living room to the ocean.
Source: REX

Selling It

Most people associate virtual reality (VR) with Oculus Rift and other video-game-oriented headsets, where users strap a black box onto their faces and enter a world where they can look up, down, and behind as the movie or game rolls along. But VR can also, it turns out, be a sales tool.

“It’s probably one of the only forms of marketing right now that consumers choose to actively engage with,” said Patrick Milling Smith, co-founder and chief executive officer of the VR production company Here Be Dragons, whose clients include Samsung, Nike, and NBC. “They actively engage with it with a sense of wonderment and excitement—you put on a headset, and you’re fully immersed.” (For an example, see the video below.)

The real estate industry, in which a primary stage to closing a sale is the act of getting a client into the space, has been understandably eager to embrace just such an immersive technology. The industry has already embraced high-end drone footage of homes; VR was a logical next-step.

“Photos only tell part of the story, and most of the time they’re retouched,” said Randy Baruh, a broker at Corcoran who’s used VR to market a $25 million townhouse and a $9,500-a-month rental apartment. “The VR experience gives you an unvarnished experience of the home.” Moving through a space—in Baruh’s videos, he acts as a tour guide through the homes—“nothing beats physically walking through a property, but this comes pretty close,” he said.

A screen shot of the Pacific Park VR experience.
A screen shot of the Pacific Park VR experience.
Source: Pacific Park Brooklyn

VR is also being used on larger-scale projects.

When Adam Greene, vice president of residential development at Forest City Ratner Cos. wanted to show off the as-yet unbuilt, eight-acre Pacific Park, he created a VR mockup of the completed park and the new 17-story luxury condo building developed by Greenland Forest City Partners, 550 Vanderbilt.

“When you’re selling condos, people can go to a sales center and touch and feel the countertops, see the floor plans, look at finishes, etc.,” Greene said. “But they couldn’t see the park itself, and we wanted to see if there was a way that people could be immersed in it.”

The video, he said, has been useful, though he considers VR one of several marketing tools. “I couldn’t give tangible results, like 'five deals closed because we had VR,'” he said. “I think it gives the whole experience of the sales center something a little bit different.” Indeed, multiple brokers all echoed the same point: VR is presently a tool that can get buyers excited, not an actual replacement for seeing the house in person.

VR in Action

Sitting on a puffy white couch in the Malibu mansion and toggling between reality and virtual reality, courtesy of an Android phone and a Google Cardboard headset, the medium’s strengths and weaknesses were apparent. The most analogous real-life experience could be the act of putting on and taking off low-prescription glasses. You could still see everything, but with the glasses off (and the VR on) things were ever so slightly blurrier.

A screenshot of the Malibu mansion's VR.

A screenshot of the Malibu mansion's VR, showing the pool house.

Source: REX

Even with the low-fidelity fuzz though, the VR headset was vastly more compelling than a photograph.

The gracious flow among the sitting room, living room, and kitchen was evident, as was the airy beauty of the living room’s French doors, which overlook the Pacific Ocean. From the perspective of the pool house, the VR captured the grand scale of the pool, portico, and flowered walkway that led to the main house. All that was missing from the experience was that ineffable gloss exclusive to high-end marketing materials, which, it turns out, is also possible in VR— it's just very expensive.

A view from the pool house.

A (photographed) view from the pool house.

Source: REX

REX’s video cost in the low tens of thousands to produce, according to the company; Baruh’s, by comparison, cost in the low thousands, said the broker. The VR rendering of Pacific Park cost from $50,000 to $100,000, Greene said. Here Be Dragons' sleek, cinema-like VR films, in contrast, are on a different playing field.

“For a four-to-10 minute, creatively-driven production, brands, studios, and networks will spend between hundreds of thousands and millions of dollars,” said Milling Smith.

The house is set alongside other, multi-million dollar mansions.

The house is set alongside other, multimillion-dollar mansions.

Source: REX

The gap is closing, though.

Just a year ago, Milling Smith said, people had to build their own rigs  to shoot VR. Now, it’s a lot more accessible. “It’s far less cost-prohibitive to shoot things.”

For Ryan, the owner of REX, this first VR project is indeed just the beginning.

“We’re actually going to send a Google Cardboard to people who could qualify for a home like this.” he said. “They don’t have to fly from Shanghai to L.A. to check this out—they can just put on the glasses.”

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