Back Investment banking and building analytics have more in common than you think
By Luis Casas, CIM
It’s been three years since I left investment banking and almost a year since I joined the CIM team. Working in both industries has taught me that real estate investment trusts (REITs) and building analytics are focused on the same outcomes, and can work very effectively together. I wanted to share my thoughts on how they complement each other for any asset manager who might be considering the value building analytics could add to their portfolio.
Analysing REIT performance
During my time in investment banking, one of the biggest transactions I worked on was a REIT capital raise. It took the team and me nearly two months to complete a full industry analysis for the client. This involved understanding profit and loss statements, reviewing balance sheets, learning about the responsibilities of each team and how the business operates, uncovering value-added capabilities and working out the potential future return on investment (ROI) for shareholders.
We had to demonstrate that the client was running its properties at the lowest cost base, without sacrificing customer experience, in order to secure the capital raise.
Analysing building performance
Every day since joining CIM, I have witnessed how building analytics delivers tangible value to real estate owners and operators. The technology helps them understand building performance in ways they have never been able to before, and identify potential risks and opportunities across their portfolio.
All REIT stakeholders from the CEO, fund and asset managers to the operations and maintenance teams are able to draw significant value from the actions building data insights provide. These insights lead to noticeably better building management and ultimately stronger portfolio performance.
Aligning REITs and building analytics to a common goal
REITs and building analytics technology companies such as CIM are driven by one common goal – to deliver the best possible value and experience for tenants, the community, the environment and investor ROI.
Building analytics has a proven track record of helping REITs improve building portfolio performance through data. In my opinion, and in the experience of others who have benefited from applying it across their portfolios, building analytics has earned the position of the perfect technology partner to help REITs save money and make money.
Here are five ways building analytics can add value for REITs:
1. Gain visibility and control over your data
Building analytics gives you much-needed visibility into plant and equipment systems performance across individual sites and portfolios. It can immediately prove good and bad performance, highlight the root cause of any problems, show what has or hasn’t been fixed and identify opportunities to add value. It also encourages team collaboration based on concrete, independent facts.
2. Optimise operational expenditure
Only by understanding how to control operational expenditure can you deliver the best outcomes at an optimal cost. Building analytics provides real-time fault identification that details the location, root cause, cost impact and solution for each fault, speeding up time to resolution while reducing the need for onsite personnel expertise to understand problems. Simple dashboards with deep drill-down capability put knowledge at the fingertips of asset owners and facility managers. Building analytics solutions can also automate alert management, prioritisation and assignment of tasks, helping to streamline maintenance schedules and costs even further.
3. Reduce energy
Digitising buildings and optimising equipment performance through continuous fault resolution and opportunity analysis drive immediate energy and greenhouse gas emissions reductions. Building analytics prioritises the resolution of faults that are the biggest contributors to energy waste to improve overall sustainability. By analysing live and historical data, onsite teams can predict and manage peak demand, ensuring the most efficient use of energy to deliver optimal thermal comfort levels at all times.
4. Make smarter capital expenditure decisions
Operating equipment and systems at peak performance and proactively identifying and resolving faults lengthens the lifespan of expensive equipment and defers unnecessary capex upgrades. Relying on performance data rather than third party costly opinions to understand what is happening with equipment also drives smarter capex planning and the return of more money to shareholders.
5. Deliver long-term value
Building analytics delivers speed to value in the short term by getting a building to peak operational performance and then protects that value over the long term through continuous intelligent monitoring. It’s no longer a choice of conflict or compromise between sustainability vs profitability – the two go hand-in-hand. Building analytics makes property portfolios more valuable over the lifetime of these assets by facilitating commercial and environmental sustainability.
Becoming an innovative fund manager
REITs are always looking for new data sources to help make a fund more profitable. Data analytics is one of those data sources that is quickly becoming a new and indispensable tool for innovative fund managers. Reducing OpEx costs, making better use of equipment and contractors, spending CapEx more wisely, and reducing energy consumption are just some of the reasons why building analytics appeals to many property owners. By combining this technology with an in-house team of building services experts and engineers, as we do at CIM, is key to generating the most value from your building assets and amplifying the results across portfolios.
CIM transforms building operations by combining building analytics, machine learning and technical engineering support into real-time, data-driven insights. We empower owners and operators to maximise the efficiency and effectiveness of their portfolio to improve asset value, tenant comfort and sustainability. Our customers include large Real Estate Investment Trusts (REITs), super funds, government, cultural institutions and major property portfolio owners and operators.
You can meet CIM at FUTURE PropTech in October at stand 73