Smart Building Platform

Taken from Julie Melander, 2019 Chair, The Counselors of Real Estate. My Company inteliGlas is the cutting edge of office buildings "Operational Technology". We are make the complex simple and bring integration, security and health to buildings. We have defined Smart Building.

The Technology Effect

“Tech is going to drive the capital markets, use of space, leasing, brokerage, valuation, and building operations,” said one Counselor in our May 2019 survey. “Technology may be making the actual location of a business less important,” said another.

It’s no surprise that technology is a Top Ten issue since it affects nearly every area of our lives and the business of real estate is no exception. Real estate has had somewhat of a different technology adoption path compared to other industries because of the bifurcation between the back-office technology and the “front of house” technology in our buildings. In other words, back-office solutions and systems were generally in-step with tech advances in other industries, whereas the buildings and the technology that run them have been at least a decade behind in employing what was otherwise current-day tech.

While leveraging many IT attributes, the buildings themselves used a different type of tech called operational technology (OT) which was somewhat left behind. The OT building control systems such as HVAC, elevator, lighting, and parking work on and depend on computer servers, operating systems, protocols, local area networking (LAN) and remote Internet access. Those responsible for designing, installing and maintaining them for the past 40 years have neither IT nor cybersecurity skills. Thus, in addition to the bifurcation issue, there is a systemic risk that the entire building-control-systems value chain does not have IT skill sets, which has operational risk implications.

Notwithstanding those risks, all the back-office and building technologies are now beset by new technology leveraging the Internet of Things (IoT), big data, analytics, digital twin, artificial intelligence (AI) and blockchain. These are all moving faster than the industry can assimilate them and as a result we see a wide variety of solution types, adoption rates, vendors and results.

If this makes your head hurt, it’s just getting started. The industry is moving into overdrive with increased intensity on occupant experience where all of this comes together in near real time by having to track people and react with environmental conditions, amenities and responsive services, and dynamic billing or allocation—all requiring integration and automation like never before.

The answer is simpler than it sounds. Like we saw with smart phones and tablets, the more technology advances the simpler it can be to have experiences and get results. Since no one expects real estate executives to be MIT technologists, don’t approach it that way. Take a step back and count on the fact that there is ample technology to support even your most inventive desires for efficiency, experience, and risk management. The real estate industry can start creating next-generation use-cases in real estate terms and not tech terms. Some large organizations have even disseminated RFPs with only use cases as the criteria and let the industry figure out how to respond, partner and fulfill the requirements.

In more general terms, organizations need to staff and organize around the realities of technology including the speed of change, which is equally bringing risk and opportunity. It’s important to measure twice and cut once. Underlying all of this is a need for new levels of cybersecurity not only addressing the data and hacking, but also the fragmented OT systems and contractors. The greatest risk is not adapting and changing quickly, which will be a competitive miscalculation or an impending operational risk or more likely both.

Technology enables shifts in consumer behavior (ecommerce), which has impacted industrial real estate positively and retail somewhat negatively. Tech companies are the dynamic drivers of economic growth, leading to highly selective criteria for office locations. Emerging technologies could cause future impact on supply chains (automated vehicles), warehouse space demand (robotics), delivery of medical services (seniors housing and medical office), data proliferation (data centers), and property security and marketing (all sectors).

Technological advancements have a nexus to many of the selected issues in the 2019-20 Top Ten. It’s at the core of international trade issues, is a central driver in demand for the four primary real estate asset categories and is central to continued productivity gains.