Mapping the Journey to Smart Building Outcomes and R.O.I.
by Mark Reynolds, Associate Director of IT, University of New Mexico, and TIA Smart Buildings Program Participant
The buildings in which we live, work and play are fundamentally changing to provide a more connected, safer and smarter surrounding environment. To accomplish this, many organizations are converging IT and OT groups as part of a new strategic approach to managing buildings and the migration of systems and subsystems to operate over IP networks. There are many factors driving new advancements in commercial real estate property technology around the world, but perhaps none loom as large as preparing for the general population to re-emerge from Covid-19 lockdown, more than a year of doing everything “- from home.”
But as buildings start opening back up, when it comes to attracting tenants and customers, commercial real estate is no longer just about location (x3). There are more competing demands than ever to meet for the next generation of customer expectations beyond proximity, such as connectivity, health/wellness, safety, security, and sustainability to name a few. To make buildings better suited for tomorrow’s occupant demands, it all starts with having objectifiable goals based on prospect preferences and actionable data to measure and guide the path to those goals.
To get where we want to go, we must first know where we are.
There was a study from the MIT Center for Real Estate that showed building owners received 37% higher rent for smart buildings than non-smart buildings. If commercial owners want to share in that level of success, they must first look at the current and holistic state of the building. One critical aspect to supporting smart technologies are the underlying networks within the building and ensuring they are ready to take on more devices and applications in a flexible way.
For government and educational institutions, it may not be about attracting deep-pocketed tenants but about attracting the best possible candidates for employment or enrollment. However, as the pandemic has upended nearly every sector of our world, education (both k-12 and higher ed.) may struggle until more stable fiscal times follow in the wake of the pandemic’s impact on budget cycles and competing priorities. Industries such as hospitality, retail and healthcare are in the best position to make use of new smart and IoT technologies to support operational functions and overall business goals because they are wired to ensure the ROI of new technologies before adding them.
However, as sustainability, security and safety are expected to be long term initiatives for facilities, the justification for funding network upgrades to support smart technologies can be positioned as critical to meeting the goals of these initiatives. This is especially true in seeking to minimize risks to occupants in buildings, stadiums, dorms, and other areas of congregation. New sensors can help with contact tracing or capacity monitoring and thermal scanning but network infrastructure must be prepared to support new technologies and keep them secure.
Smart Buildings Needed for Smart Cities
The federal government is showing more interest in advancing smart technologies for buildings and cities. Recently, elements of the Smart Building Acceleration Act were passed by Congress as part of a Covid aid bill but most have yet to be funded with official appropriations. Many forward-thinking state and city governments are looking at how they can use this opportunity to both attract new smart tech businesses and industries while also incentivizing modernization the properties throughout their jurisdictions.
Smart buildings will be the foundational elements of smart cities. And since we cannot call cities or buildings smart if they are not sustainable, minimizing environmental impact must be part of this plan for a smarter future. We soon will have the perfect blend of technology, high speed networks and data analytics that will enable us to make great strides in the next decade alone.
Many U.S. cities like Pittsburgh, Las Vegas and Albuquerque are already experimenting with smart technology to do things like reduce peak load times on local grids, better manage use of natural resources, improve infrastructure costs through predictive maintenance, and enhance public safety applications for first responders. With 5G networks offering more bandwidth and flexibility in combination with edge data centers providing lower latency, new applications like drone deliveries, smart traffic and parking for autonomous cars will soon become reality in some cities.
Working for Smarter Outcomes
As owners of new and existing buildings plan to make their assets smarter, the reasons for doing so (beyond enhancing safety measures for post-covid), will vary, largely based on the vertical industry being served by the buildings. The smart technology ROI will be unique as the building itself.
Owners and managers can take a page from marketing tactics by defining what the perfect tenant, occupant or candidate persona would want from their building now and in the future. From there, owners can determine the top smart outcomes they want to achieve to meet that demand and then chart the course for the journey to produce that outcome over time.
The first step, especially for owners of existing buildings, regardless of the scope of desired outcomes, is learning where the building currently stands to support smarter capabilities. One way to accomplish that is using the SPIRE smart building assessment and rating program developed by TIA and UL. The SPIRE online self-assessment provides criteria feedback in the six core smart building categories: connectivity, safety, power & energy, health & wellness, sustainability, and cybersecurity.
With assessment criteria developed by industry experts in the TIA Smart Buildings Program Working Group, SPIRE is the most holistic and comprehensive smart building assessment tool on the market and will help building owners identify the key areas to invest in to increase both the capabilities and more importantly the overall value in their properties.
As we emerge from COVID in what will be a highly competitive commercial real estate market, now is the time to assess where our buildings stand.