Smart Building Solutions are a major opportunity….
By using technology to deliver new Digital Services, property owners and managers have more options to improve outcomes with additional capabilities to –
A. Better manage their properties, deliver more value, increase operational efficiencies, reduce environmental impact, and be more competitive
B. Address the challenge of less demand for office space going forward – with more people working from home because of the COVID-19 pandemic, providing communications with collaborative technology to increase appeal to talent and be a more flexible organization
C. Expand revenue streams and reduce costs
D. Increase property value
In conjunction with this, Real Estate Executives need to –
1. extend the steel, concrete and glass mindset with digital competencies
2. become much more technology literate and move to a new business model
3. have a much greater understanding of how to deliver a great User Experience
4. be highly competent at creating value, monetizing innovation, and managing the changing nature of risk
…. change the mindset with new thinking
Because of these dynamics with the opportunities and challenges they pose, increasing business demands, rising user expectations – there is a paradigm shift in the making in commercial real estate.
The upside of this is organizations need to be more innovative and transform to make good on new opportunities and expand revenue streams as well as being a more efficient and responsive organization with new Digital Services.
To win in commercial real estate going forward it’s about realizing the advantages from technology with solutions, software platforms, IoT / sensors, data, analytics, AI, ML, etc. with greater automation, personalized services, more tenant self-serve capabilities, etc.
Fundamentally, it’s about Real Estate companies having “ various Smart Building digital capabilities “ and being able to “ Innovate for Impact “ – to meaningfully improve outcomes.
Those that successfully change will be part of the future – and those that don’t will either be severely marginalized or fail.
….much like what has already occurred in – Retailing (Amazon), Transportation (Uber / EVs), Accommodation (Airbnb), video (Netflix), Music (Apple / Spotify), etc.
Examples of “ Smart Building Solutions “ –
- Expanding Digital Services for Tenants, Property Managers and Landlords – With technology becoming more pervasive and people expecting convenience and relevant information on demand, the need is to innovate for impact with new capabilities to meet User expectations and enable real estate personnel to better manage the property and create value – quickly and easily. Building information services (in mobile and on the desktop) as well as automation systems provide greater functionality, enable facility managers to optimize operations, and increase User satisfaction with more self-serve capabilities. Smart Building Solutions streamline time-consuming processes and provide more insight into what’s going on that are important to tenants as well as facilities managers. This is important to attract tenants, reduce costs / work / liabilities, improve building operational efficiencies and safety.
- Integrated Systems – to reduce friction and create ecosystems the availability of Internet of Things devices (IoT) makes it possible for multiple building automation systems to come together in a centralized solution. IoT networking capabilities act as the bridge between systems that don’t offer native integration. Facility managers can access this data and get full visibility into building operation without checking multiple systems.
- Adapting to Tenant’s Technology Requirements – Commercial real estate developers need to appeal to current tenants increasing demands for digital capabilities and potential tenants’ requirements for services when they’re looking for new premises. If the building doesn’t offer the same or better features or value as other available properties in the area, space is going to stay vacant ! Since landlords invest a lot of money into maintaining the building and marketing it to new tenants, increasing property appeal with expanding digital capabilities is very important to maintain or have the opportunity to increase revenue streams from the property.
- Better Optimization of Building Operations – Automated systems in smart buildings enable facility managers to reduce energy expenses, create more comfortable environments and quickly address errors when they occur. The data generated by IoT sensors provide real-time information to quickly address an issue, assist in identifying trends, etc. This is important to evolve business processes, expand services, etc. to further improve outcomes.
- Tenants Paying Extra for New Services – Properties with Smart Building capabilities have higher appeal than those that don’t. This is especially true for tenants needing technology infrastructure to better run their business, attract talent, etc. Further, since tenants are increasingly putting their own technology additions in place to extend capabilities – this further increases property appeal and value.
- Reducing Building and Occupancy Environmental Impact – Smart Buildings automatically handle many routine processes, such as climate control, occupancy requirements, maintenance (ie: Smart cleaning / washrooms). Because of this there are greater operational efficiencies and fewer opportunities for human error. As well, this makes for a consistently better environment and User experience – and get past issues with people forgetting to turn down the thermostat for the weekend, not realizing there is a malfunctioning HVAC unit, not taking action to clear a messy work area or washroom, etc.
- More and Better Solutions / User Experiences / Automation – with versatile IoT sensors – Smart Buildings have many possibilities with IoT capabilities. With IoT being a flexible technology that can go practically anywhere within the building to enable facility managers get additional information from more data from more sources for major operational improvements with better analytics, automation, the ability to better handle maintenance and repair work, etc.
Conclusion
Smart Buildings are transforming the commercial real estate market for building owners, facility managers, tenants and others. As the IoT market matures and new technology makes its way into commercial real estate, the digital transformation will continue and opportunities to create value will expand. Because of this, Smart Building Solutions are becoming as important as location, design, and major property amenities. Further, with the changing business landscape, the need to innovate for impact, and the fallout from crises (ie: COVID-19), etc., the need is to develop new competencies and update the thinking – now – if the objective for the organization is to increase relevance and revenue.
June 15, 2020 – CAIL – Smart Buildings commentary info@cail.com