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SUSTAINABILITY

The future of digital Commercial Real Estate (CRE) management has arrived

staff_0005s_0000_W---Larry-Yogel
Larry Yogel| CEO
March 7, 2021

Buckle up — CRE property management is about to change forever. Until 2021, the digital transformation of building management has been long on promise, but short on progress. in fact, there are now many digital capabilities embedded in commercial buildings. Over the past decade, every HVAC, lighting, water, security systems provider has incorporated controllers and IoT performance monitoring technologies into their products. But get this:

The typical mid-size office building generates over 2000 data signals every minute from its building assets

Nevertheless, this hidden trove of vital building data is woefully underused to reduce energy consumption and building operating costs. Today, the typical office building spends 24% of its direct operating costs on energy and maintenance; depending on the building type, that’s anywhere from $4-6 per sq. foot. Hospitals and food distribution facilities that have high refrigeration requirements can spend as much as $8-10 per sq. ft. By using the “hidden data” inside these buildings, property managers and facilities engineers can reduce operating costs by $1.00-$2.50 per sq ft. with no capital investment.

Couple those savings with the high impact on environmental sustainability, and you can know see why buildings owners and tenants are driving property managers and facilities engineers to faster data-driven digital transformation.

Knocking down the barriers to CRE digital transformation

Here is the challenge. Until now the capturing, tracking and management of CRE asset performance data has been silo’ed and ‘locked down’ in the proprietary systems of each vendor. Siemens, Honeywell, Johnson Controls, etc. have each developed powerful apps through which they can control the performance of their equipment. The result? Every building has a complex, unique ‘spaghetti web’ of vendor-specific apps and databases that make building performance optimization a difficult, if not impossible, task.

The promise of next gen CRE digital transformation is getting to a single source of real-time building asset performance data. Several innovative companies (including ours) have now developed technology to “unlock” the hidden data…

  • In every building asset…in any building…across an entire building portfolio…
  • …even if each building is operating on a different building management system (BMS)
 
 

More importantly, digital building management technologies are now enabling:

  • Real-time dashboards for facilities engineers, property managers, and building owners
  • Remote capabilities to adjust setpoints (temperature, humidity, fan speeds)
  • Rapid identification and location of specific asset failures
  • Artificial intelligence(AI) to analyze and prescribe rapid alarm resolution
  • Machine learning to predict future high propensity failures
  • Algorithms to optimize asset lifecycles and replacement schedules

 

This is no longer a pipe dream. Large property portfolios are already seeing as much as 20% reduction in energy consumption (think sustainability too) and >30% reduction in 3rd party maintenance costs. What’s more important to building owners, these performance improvements can 2x building NOI (net operating income) and require no capital investment or asset retrofitting.

Bottom line – the next gen of data-driven building management has arrived. Property managers and facilities engineers can now deliver enormous incremental value to building owners and tenants if they embrace digital building operations technology and get ahead-of-the-curve on data-driven performance improvement.

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