How Smart Buildings are Transforming CRE

Smart buildings are changing the nature of commercial leasing, and commercial real estate industry-wide. The enhanced technological features of buildings play an increasing role in transactions, which influences the market itself. The smarter buildings are, the more data they generate, which in turn streamlines asset management.

Analysts predict that the smart building market could reach $265.37 billion by the year 2028. To put this in context, the market share in 2020 was $57.30 billion. This immense growth is a predicted result of the market stability that should follow the global COVID-19 pandemic. Investments in sustainability and smart building technologies are being made with this future in mind.

How Smart Buildings are Transforming CRE

What is a Smart Building? 5 Smart Building Examples

Smart buildings are specially designed or updated to include technological components. For example, buildings like this contain hardware and software systems that manage operations, collect data, and make amenities more accessible for tenants. Smart buildings are often integrated with a setup of microchips, actuators, and sensors that are tied to a building’s heating and cooling systems, lighting systems, and electrical systems. Some smart buildings also have high-tech security, and most aspects can be remotely controlled.

The Internet of Things (IoT) has made this technology available and accessible. IoT makes it possible to control building temperature or manage security and maintenance through mobile devices. All of the smart features and devices are connected to an internet network. Building automation technology, or at least the potential for it, has existed for many years. With the advent of IoT, remote connectivity is now available. This facilitates a streamlined information system that makes building intelligence possible.

Smart buildings are often mentioned in connection to property technology, or proptech. Proptech in commercial real estate is a growing sector, but it provides resources for managing building assets, rather than features of a building itself. While the two can overlap, they provide different benefits in different contexts.

Intelligent building design is a globally expanding phenomenon, and here are five examples of modern intelligent building designs —

• The Edge Building in Amsterdam, Holland — The British rating agency, Building Research Establishment Environmental Assessment Methodology (BREEAM), rated The Edge Building in Amsterdam as the most intelligent building in the world the year it was built. It has car identification technology, parking assistance, schedule and calendar integration, and devices to record user food and beverage preferences.

• Oakland City Center in Oakland, CA — This building was developed by Siemens, and has many dynamic and AI-powered systems. One of its noteworthy features is the advanced air volume, or VAV, system. This system can put the entire building into green mode, a setting that uses aggregate data to optimize humidity, pressure, and temperature. It also has a decontamination mode which raises the temperature in an effort to accelerate the decay of airborne virus particulates.
• Cisco Systems Canada Headquarters — This was the first building in Toronto to be rated as a Leadership in Energy and Environmental Design (LEED) Core and Shell Platinum Building. The intelligent building links up to Cisco’s business operations and facilitates Cisco’s Internet of Everything (IoE) as well as streamlining all building data into a single network.
• AXA Belgium — Winner of the New Corporate Headquarters category in the 2020 Verdantix Smart Building Innovation Awards, this building exemplifies space optimization. Using 1,850 sensors, the building management team gathered a robust dataset that informed a utilization project. In time, this data resulted in practices that reduced desk-to-employee ratios to 0.6.
• Mitie in London, England — Perhaps the most striking example of IoT in smart buildings, the Mitie building uses automated alarms, remote equipment management, machine learning, and data analytics to achieve a 95% accuracy rate for predictive maintenance calls and a 3% improvement of energy use by clients.

In addition to BREEAM and LEED, some additional assessment frameworks have been developed that are classifying buildings as intelligent and offer ratings or certifications. These include the BOMA Canada’s Best Smart Buildings Certification Program’s Pilot Project — which is the Canadian branch of the global BOMA network, including BOMA Houston — and the SPIRE™ Smart Building Program that is developed by the Telecommunications Industry Association (TIA).

10 Use Cases for Smart Building Technology

Companies are investing in either retrofitting smart features into existing buildings or constructing new buildings with smart technology. There are many uses cases for smart technology, which include the following:

1. Sensors that monitor air ventilation and clean air quality
2. Voice control or voice-activated services and technology
3. Touchless technologies, such as fobs, motion sensors, and digital key cards
4. Smart parking, which provides open space notification or digital reservation processes
5. Contactless amenities, such as food ordering or supply reordering
6. Hyperconnectivity to internet providers, such as Verizon’s 5G Ultra Wideband network, which provides superior internet services and speeds
7. Certified network control, which ensures the highest level of security for connected devices
8. Clean energy or renewable energy features with smart appliances or systems to reduce overhead and support sustainability
9. Maintenance monitoring and alerts, activated by sensors, cameras, and automated software systems
10. Utilities optimization, through monitoring of peak utility usage and smart thermostats, like ecobee, that can optimize comfort while reducing energy spend

Smart buildings provide a key benefit to business owners because smart features provide data. Through this, asset tracking becomes more precise, which makes asset management easier.

The Smart Building Tenant Experience

Part of the return on investment for smart building upgrades or construction is enhanced marketability. Tenant experience is directly affected by elements of the smart building. Better security, ease of access, and a healthier environment are just a few benefits. A Building Management System (BMS) ensures 24/7 tenant support.

When tenants are content, building owners, landlords, and business owners all benefit. The World Building Council conducted a study, reporting that cleaner indoor air and enhanced lighting conditions result in an increase in worker productivity of 11% and 23% respectively. The same study also cited cost savings due to less turnover or absenteeism and improved (self-reported) attitudes about employee health and wellbeing.

How Smart Building Technology is Shaping the Future of Commercial Real Estate

Intelligent buildings are making a wide-scale impact on the commercial real estate industry. CRE professionals are equipped to better manage portfolio risk and assets, as well as creating differentiation in the market. Providing service innovation to tenants can be an advantage in a steeply competitive landscape. Intelligent building features also lower operating costs, and represent a broader ecosystem of connectivity. The future is one of opportunity in terms of sustainability, savings, and increasing the value of a property. Smart building technology is here and here to stay.

This story is republished with permission from: https://www.ccim.com/cire-magazine/articles/2022/spring/working-smarter,-not-harder/

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