Last week, we covered smart home technology and the benefits to the Residential sector. This week we will discuss the impact of IoT on (CRE) commercial real estate.
IoT – Bringing Buildings to Life!
Buildings are generating data every second and it’s up to today’s real estate owners to help their clients capture and understand that data.
Whether it’s the HVAC system adjusting the temperature throughout the day, manufacturing equipment running and shutting off as needed or a security system logging when an employee’s & visitors enter or leave the premises.Buildings can provide value added insights can help management make more informed business decisions.
As client needs evolve brokers, facility managers & owners must develop new skills to keep up with the changing technology landscape and remain competitive.
A differentiated value proposition – Not based on Location, Location, Location.
IoT is enabling commercial real estate providers to create differentiated value to customers by providing smart solutions to control various systems at homes, offices and the spaces they frequent. CRE without IoT technology will fall further behind, losing comparative value to the smarter alternatives. This fundamentally changes the value proposition landscape for CRE from one centered on location to one driven by technology and data!
Changing Skillsets and Mindsets
IoT is forcing commercial real estate brokers to acquire a new more sophisticated skill set rooted in technology, cybersecurity and innovation. Nowadays clients require brokers to be more than just real estate experts — they must also be technology strategists that can help clients acquire buildings that support their corporate technology goals.
Applications in Commercial Real Estate – Areas which can be improved with IoT
- Energy Management
- Security and Safety
- Asset Maintenance
- Enhancing Occupant /Tenant /User Experience
- People Movement
- Space Utilization
Who are the companies working on CRE IoT?
Here is a list of the companies who are focusing on IoT for Commercial Real Estate: (We will be compiling a more comprehensive list for IoT but for now – here is an overview!) Quite a lot of players!
The Size of the Market:
Commercial real estate is predicted to outweigh all other building types with smart homes coming in at a close second. Manufacturing comes in third with healthcare coming in last. (Ref. Memoori)
Expert Opinions –
Q&A with CRE Expert: Duke Long
Duke Long will be flying over from NY to share his thoughts on our main stage. As a warm up and prelude to the day – we thought we would ask his expert opinion on the IoT scene in the USA:
As clients need’s evolve, what skills must brokers develop to keep up with this changing tech landscape and remain competitive.
Answer: Let’s use a simple example. WeWork, you could asses their business model in many ways but the very core of what the have accomplished in a very short time is to make every human being a possible tenant. And that potential tenant can now be a customer for life. WeWork can and will provide that tenant those services possibly forever. What’s the answer to competing with that? It’s not acquiring hard assets and or being the in between broker unless those services along with those assets are digital.
Q2: Demand for change:
The US bureau of Labor Statistics estimates that by 2020, 50% of the workforce in the USA will be freelancers. How do you see IoT catering to these new demands?
Answer: I see IoT as a usable easy-to-integrate technology that will connect members in order to facilitate community engagement, skill-sharing, referrals, social interaction, and a sense of belonging. Workers are looking for spaces that allow them to schedule desks, make conference room reservations and network within the space’s community. Anything to make the workday and workflow more efficient will be an essential part of what IoT will help accomplish. Easy access to these amenities has become a necessity for coworking spaces rather than just an add on service.
Q3: Commercial or Resi?:
In 5 years time, do you think IoT will be used more in commercial use or in residential / smart home use?
Answer: I will admit to a bias here but it will be commercial Buildings are generating data every second of every day, at least the ones that have already and will embrace IoT, and it’s up to today’s real estate brokers to help their clients capture and understand that data. Whether it’s the HVAC system adjusting the temperature throughout the day, manufacturing equipment running and shutting off as needed, or a security system logging when an employee enters or leaves the premises, buildings can now provide that can help management make more informed business decisions. It seems to make just to much practical sense.
Q4: Geographically, Where?:
We all know that Silicon Valley is probably the most IoT connected place on earth, but what other areas in the USA are adopting this technology on a large scale?
Answer: New York. It’s been said that 25% of all developed real estate in the US is in and around New York. Where is San Francisco again? One that might go a bit unnoticed and I think underated is Los Angeles. They call it Silicon Beach. It is after all the second largest city in the US. The next city usually mentioned is Austin Texas but some might want to take a look at Charlotte North Carolina regardless of its size Charlotte can compete with any of the other cities in all areas of IoT.
Q5: Location, Location, Location:
Location plays a big part in Real Estate, will Smart Building technology allow for buildings in less popular areas rise to the top in terms of value?
Answer: It may be the only chance they have to enhance future value. Bringing quality services to a specific structure and can also potentially bring that building and location a new and more functional life.