Using Satellite Imagery for Commercial Real Estate

The Soviet Union launched the first artificial satellite — Sputnik 1 — into space on October 4, 1957. The U.S. followed a few months later, launching Explorer 1 on February 1, 1958. These early satellites collected data about the Earth’s atmosphere and gathered data about the propagation of radio signals in the ionosphere. 

Satellite technology has come a long way since the late 1950s. Today’s satellites have many more uses:

  • Communication relay, including phone calls, internet data, radio and TV broadcasts
  • Weather forecasting
  • Earth observation
  • Navigation, including GPS, Sat-Navs in our cars, and ship and airplane tracking
  • Military surveillance and early warning detection
  • Wildlife and endangered animals tracking
  • Climate change, natural disaster monitoring
  • Underground water and mineral source detection

But that’s just the tip of the proverbial iceberg. Satellite imagery also supports commercial real estate throughout the lifecycle — from initial market analysis and site selection to property evaluation, investment due diligence, and portfolio management. Here’s how it works.

Cost-effective, real-time monitoring

Gone is the complete reliance on expensive, time-consuming site visits and drone deployments. Will situations arise that benefit from this approach? Absolutely. But satellite imagery provides a cost-effective, consistent strategy for monitoring all sites of interest in near real-time. Regardless of the size, remoteness, or dispersion of sites, this data allows CRE professionals to stay informed, easily manage geographically diverse portfolios, and make decisions from a centralized hub.

CRE professionals can apply enhanced algorithms to enhance the data further and even generate and deliver automated insights and reports almost instantly. A continuous stream of information facilitates proactive management and prompt action when needed.

Long-term planning with satellite imagery

CRE development often involves significant upfront investment in structures expected to last decades. Satellite intelligence acts as a vigilant guardian, keeping real estate and land management professionals apprised of any number of potential issues like:

  • Encroachment. Quickly identify unauthorized structures, changes in land use, or unexpected vegetation growth, for example.
  • Construction delays. Monitor construction progress, even in remote areas, to streamline project management.
  • Unusual activity. Stay informed about unexpected changes in site activity patterns.
  • Environmental shifts. Gain insights into environmental changes like soil mixture levels, land subsidence, or weather patterns — data that informs strategies for mitigating future disruptions.
  • Underutilized assets. Uncover areas or periods with low use to allocate resources more effectively.
  • Supply chain bottlenecks. Sometimes, satellite data can reveal bottlenecks within the production process or supply chain to facilitate smoother operations. 

Climate change, coastal erosion, and flooding

For developers, selecting the right location is crucial, as is understanding potential long-term challenges, like the impact of climate change. Satellite imagery offers an incredible tool for monitoring coastal erosion. By analyzing historical and current satellite images, developers can assess the erosion rate at a potential site and project its future impact over a building’s planned lifespan. 

This information can help mitigate risks associated with rising sea levels and receding coastlines. Imagine developing a beachfront property only to see it grow increasingly vulnerable to flooding — or disappear entirely under the waters. 

Satellite imagery empowers developers to identify areas prone to flooding based on historical data or analyze the risk of landslides in specific areas,  make informed decisions, and avoid costly mistakes. But, applications of this technology extend far beyond the coastal regions. Investors can leverage it to gain insights into many factors that could influence a property’s value and long-term viability.

Other useful analyses

Developers can also use satellite intelligence to monitor deforestation or regrowth patterns to assess environmental sustainability. Imagine the ability to uncover potential contamination sites based on historical land use patterns — or understand the urbanization trend in a specific location to predict future infrastructure demands. Data from satellites also enables the analysis of historic traffic patterns to understand development needs and infrastructure requirements.

CRE professionals can use satellite imagery to:

  • Track construction activity in specific areas. Doing so allows them to identify emerging trends and assess the potential impact on their own projects. Are there new transportation hubs or industrial developments planned nearby, for example? This information can help developers anticipate future demands and adjust their plans accordingly.
  • Monitor the condition of nearby infrastructure, such as roads, bridges, and utilities. Deteriorating or underdeveloped infrastructure can significantly impact a property’s accessibility and value. Proactively identifying potential issues enables developers to plan for necessary upgrades or choose alternative locations.
  • Gain access to a wealth of information that will give them a competitive edge. Understanding the long-term environmental and developmental trends affecting a property allows investors to make better-informed decisions and proactively mitigate risks associated with their projects.

Much promise amidst the misconceptions

The true potential of this technology in CRE remains somewhat untapped because many professionals lack awareness of the available — and often free — up-to-date technology imagery resources. Popular mapping applications with high-res aerial imagery sometimes lack easy ways to overlay their data with other relevant information. One common misconception persists — that free satellite imagery is inherently low-res and, thus, useless. This misconception isn’t entirely true.

For industrial developers, particularly in fast-growing markets, identifying vacant land and following construction activity is crucial for evaluating project viability. Popular mapping tools like Google Earth and Bing Maps offer great base maps with high-res aerial imagery. But these visually stunning images are expensive to get — and aren’t updated with regularity, leaving them somewhat unreliable.

What is freely available? Medium-res imagery. It lets you understand the area, identify large-scale changes like new construction, and understand the overall layout. While zooming in might not reveal intricate details like building specifics or vehicles, it does provide a valuable initial assessment. 

Here’s where high-res imagery comes in. A cost-effective approach involves leveraging free, medium-res imagery for the initial research and then purchasing high-res images only when you need to examine the data more closely for more detailed analysis.

The good news? It’s a lot less expensive to acquire high-res satellite imagery — over 85%, in fact, compared to a few years ago when each image might cost thousands of dollars. Now, an image might cost $200 or less — and the price is still dropping. You can thank significant investments made by private companies in launching new satellites for contributing to the shift. Today, purchasing a high-res image is often less expensive than sending someone to visit a site physically.

One imagery player in the CRE space

One imagery player using geospatial data gathered from 1,000+ satellites in the CRE space is a company called Astraea. Its EarthAI model offers a robust suite of tools, including a point-of-interest database, satellite and aerial imagery, an integration of U.S. parcel data, built-in terrain layers, and much more. Many industries, including real estate, agriculture, conservation, carbon finance, and clean energy, rely on the company’s imagery and geospatial analytics to make data-driven decisions.

Overall, satellite imagery is a valuable tool throughout the CRE lifecycle. Leveraging it with other data sources empowers CRE professionals to make informed decisions and gain a competitive edge.

Are you a commercial real estate investor or looking for a specific property to meet your company’s needs? We invite you to talk to the professionals at CREA United, an organization of CRE professionals from 92 firms representing all disciplines within the CRE industry, from brokers to subcontractors, financial services to security systems, interior designers to architects, movers to IT, and more.

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