Smart buildings/IoT are changing the real estate industry. That’s because when smart buildings connect with the Internet of Things (IoT), they can help real estate professionals realize a variety of benefits.
When the IoT connects with facilities to improve building automation, it can lead to more energy efficiency. It can also lead to streamlined and more cost-effective buildings—making it particularly appealing for anyone managing corporate real estate.
In this article, we explore how smart buildings enabled by IoT can benefit many elements of real estate portfolio management.
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Every day it seems like more ‘smart’ objects surround us.
You might wake up to a smart alarm clock, grab OJ out of your smart fridge, and have coffee made just the way you like it in your smart coffee maker… All before getting in your smart car and driving to your smart workspace. We call these devices ‘smart’ because in one way or another, they interact with both you and other devices in an intelligent way.
With so many smart devices, you might say you have a smart home.
A smart building works along the same principles, but on a much bigger scale. It uses advanced and integrated building technology systems, including building automation, life safety, telecommunications, user systems, and facility management.
It’s a complete ecosystem of integrated smart technology, designed to improve building operations along with energy use.
This should include collecting data that companies can use to improve the building or office space. They can specifically use data to make it easier and/or cheaper to manage, and/or to make life easier for tenants.
We call a building ‘smart’ when, according to the Smart Building Institute, it has “intelligent control systems and smart and interconnected devices beyond the traditional building structure and function.”
Companies can achieve this level of intelligent control and interconnectedness with the IoT.
The IoT is like the name suggests. It’s when all sorts of things, quite literally, connect to the internet. This is through a combination of software, sensors, and other technologies.
Assuming your smart fridge and smart coffee maker connect to wi-fi, you are essentially using the IoT in your home.
And when real estate professionals use IoT sensors and other IoT devices, they are creating a smart building. And IoT is powering at least part of that in may cases.
IoT technology also impacts building automation systems (BAS) in exciting ways.
Sometimes referred to as a building management system (BMS), BAS in commercial buildings is what brings a wide variety of building functions to one shared network. This can include: HVAC systems (heating, ventilation, air conditioning, and air quality systems), lighting control and other lighting systems, alarm and emergency systems, access control and more.
Good BAS can lead to a much more efficient building. And they can compile building data that can help in areas like predictive maintenance and improved energy management.
IoT is dramatically shaping building automation, just like it is shaping smart building technologies. Not surprisingly, BAS work best when IoT integrations are there to enhance them.
Namely, new IoT solutions bring cutting edge solutions that are accessible to owner-operators of even small or medium sized buildings. Now virtually every real estate manager has the relatively easy option to convert their properties into intelligent buildings. This can dramatically reduce costs and carbon footprint, while also keeping tenants happier and healthier.
“Just as the IoT architecture and technology is being applied to manufacturing and production systems across industry,” says Dick Slansky of the ARC Advisory Group, “the next generation of building management systems will be driven by IoT ecosystems of smart connected sensors, edge devices, equipment, analytics, and systems architecture.”
However, introducing IoT into BAS can weaken what is already an often weak security network. That’s because BAS are notoriously much more insecure than your corporate network. For example: the ‘regular’ network employees use to access the internet).
“A CRE company’s IoT-enabled systems can be a fully integrated BMS, allowing higher-order cost, productivity, and revenue benefits with a deep customer and data focus.”Surabhi Kejriwal and Saurabh Mahajan, Deloitte Center for Financial Services
“A CRE company’s IoT-enabled systems can be a fully integrated BMS, allowing higher-order cost, productivity, and revenue benefits with a deep customer and data focus.”
This is especially true when it comes to IoT ‘edge devices.’ This includes routers and other devices that connect the object to the network. When these edge devices in your BAS aren’t properly secure, they don’t just provide internet connectivity. They also can provide an easy entry point for hackers, making heightened security in building automation systems a necessity.
This means facility managers (FMs) should take necessary precautions to ensure that leveraging IoT doesn’t come at the expense of building security. A task best accomplished with good collaboration in the workplace between FMs and IT managers.
We’ve known for a long time that things like motion sensors can help building owners improve in areas like energy consumption. This can lead to both cost savings and a more environmentally friendly space.
But the benefits of smart building solutions certainly don’t end there. Especially now that these solutions are becoming much more affordable and accessible.
First and foremost, the data analytics provided by smart building IoT sensors are much more robust than anything real estate professionals have had access to in the past.
With real-time data, CRE professionals can create better sustainability cost-saving initiatives, based around actual occupancy rates and space utilization. For example, when buildings use a badge system to track when and how building occupants are using a space, real estate managers can use this data to adjust when and where the lights (and other systems) stay on.
And since these insights and improvements also benefit tenants, smart buildings and IoT applications can also lead to better tenant relationships.
In other words, smart systems integration is mutually beneficial. Tenants will appreciate the lower energy bills due to improved energy efficiency. They may also be able to use IoT to generate more revenue. They can do this by providing insights into customer flow and foot traffic.
Ultimately, having the right data on hand helps real estate professionals make better decisions. This benefits everyone who uses a space. This is especially true when retail real estate providers offer the ability to use mobile phones and beacons to understand customer behavior.
Plus, given the health and safety demands of our new reality, this same information can be used to help tenants ensure their customers and employees are able to maintain social distancing.
Real estate professionals managing multifamily buildings. can also enjoy most of these benefits of smart buildings. Tenants will also appreciate the energy efficiency and preemptive maintenance. Meanwhile, industrial units may be able to ship faster and improve customer service.
And virtually every building and tenant will benefit from the enhanced security options provided by smart and real-time monitoring and notifications.
“With the amount of connectivity and data generated by IoT-enabled buildings, CRE owners have an opportunity to differentiate themselves by using the information to identify unmet consumer demands, provide more sophisticated services to their tenants and transform tenant and user experience, and contribute to the broader ecosystem,” says Surabhi Kejriwal and Saurabh Mahajan of the Deloitte Center for Financial Services. “By offering services their competitors as yet lack, CRE companies using IoT applications in this way could charge premium prices and improve margins.”
IoT in the workplace can be a particular boon for those whose real estate portfolio management includes optimization of workspaces.
Especially given that FM duties now often include helping to manage a company’s real estate portfolio, having smart IoT technology that also integrates with workplace space management software can even further amplify the cost savings and other benefits.
For example, many companies are in the process of creating a free address workplace. This is often to improve both hybrid work and/or the agile working environment. Free addressing is a form of flexible seating that allows employees to sit in whatever workstations are free. As such, it can be dramatically improved with workplace sensors and badges that track which desks are being used, when.
This information can also be funneled into other hybrid workplace technology. This can then be used to provide more visibility to employees, along with critical space utilization data that FMs can use to make smarter decisions for the office going forward.
In short, IoT based facilities management can lead to a dramatically safer, efficient, and innovative office space.
The writing is on the wall. Real estate management of the future will be less about location and more about smart ways to add value to tenants. Given their many benefits, we can expect smart buildings enabled by IoT to be the default buildings of the future.
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Photos: gorodenkoff, shironosov, Matthew Henry, FangXiaNuo