“A century ago the luddites tried to disconnect. They failed” writes an anonymous Yale economist in response to the Pew Research Centre and Elon University’s recent survey on the implications of our increasing reliance on connectivity.
It’s a timely comparison, as billions more everyday objects connect to the Internet of Things (IoT) it is hard not to compare the luddites of the 19th century to today’s apprehension about the IoT and its effect on the labour force. Canvassing the opinions of technologists, scholars, practitioners and strategic thinkers, the Pew report identified a number of themes on the IoT and connected life – crucially, that people crave connection and convenience and if you think unplugging is impossible now, by 2026 it will be even more difficult. A number of respondents observed that the efficacy and usefulness of IoT platforms and services will drive IoT decision-making; the benefits of IoT products and services ensuring continuous and ever-growing connectivity.
So, if resistance is indeed futile, what are the implications for the commercial real estate industry, an industry in which the IoT is currently more pervasive than anywhere else.
What exactly is the Internet of Things?
The IoT encompasses internet networks that connect smart objects, the technologies that make these connections possible and the services that bring those technologies to the market. The phrase has become a term of convenience for a suite of technologies that equip devices for digital communication, connecting these devices for instant data analysis.
The IoT makes the Internet even more immersive, utilising the Internet backbone to enable easier access and interaction with a variety of devices. The IoT in automated building maintenance has long been used to enable “smart” buildings to differing degrees, but we are rapidly moving beyond motion-sensor lighting.
How are IoT-enabled technologies currently changing commercial buildings?
The major driver for innovations in this sector has been, for the most part, energy and sustainability, with a global focus on advancements in a marketplace of new energy products, services and companies. In Australia, the building sector accounts for nearly 20% of the total energy consumption and it is estimated that the average commercial building wastes as much as 30% of that energy.
“Intelligent” buildings monitor resource consumption, carry out preventative maintenance and use collected data to provide valuable insights that boost efficiency and reduce energy costs. It is estimated that up to 80% of a building’s lifecycle costs and duration is related to building operations, and astute owners internationally are making investments in these building systems, creating new value in the use of IoT-generated building management systems.
Equipping buildings with thousands of sensors is not what makes a building “smart” it is the ability to process and learn from all the data the sensors provide reducing inefficiencies and utility costs.
Chief Operating Officer of facilities management company ISS Martin Gaarn Thomsen accepts that in a smarter building staff perform better, and last year the company made its single largest investment in IoT technology since its inception.
ISS collects data using embedded sensors in a wide variety of building elements like doors, windows, meeting rooms and air-conditioning systems. Thomsen explains, “We can show the data to our customers, for example, and say: ‘These offices you have on the third floor, in the north-east corner, are never used. So why not convert them into meeting rooms, which you are short of on the first floor, or change them into project rooms lacking on the second floor?’”
Commercial building owners are uniquely positioned to adopt IoT applications that enable building management systems and use the sensor-generated data to enhance the occupant’s experience. In an increasingly volatile business landscape, simply providing a workspace in a great location is no longer sufficient: “Technology is changing the most fundamental truth about commercial real estate, that value is based solely on location”.
How can the IoT add value to your project
Late last year, research firm Memoori released a report projecting that the global market for the IoT in buildings (BIoT) will grow significantly over the next decade as IoT technology converges with building automation systems. Memoori predicts that increasing interoperability will fundamentally change the way we interact with the built environment and create opportunities for the more “forward-thinking” players.
In any case, IoT-enabled buildings can add real value within the commercial real estate sector – with specific opportunities in the adoption of embedded, or fully-integrated hardware, automation software and building management systems already enhancing building performance.
Building Management Systems (BMS)
IoT-enabled building management systems are used to reduce energy use, repair and maintenance and building administrative costs. Property owners can use data collected by motion sensors to regulate HVAC and lighting systems to lower operating and energy costs.
Bettina Tratz-Ryan, research vice-president at Gartner Inc., suggests that the predictive capability of IoT-enabled building management systems can pre-empt a repair or maintenance issue. “In large sites, such as industrial zones, office parks, shopping malls, airports or seaports, IoT can help reduce the cost of energy, spatial management and building maintenance by up to 30 percent.”
Swedish property management firm, Stockrose partnered with Eniga, a provider of intelligent cloud solutions, to connect the approximately 250 buildings and 10,000 apartment units it operates to Microsoft’s Azure IoT technology. The result of their collaboration will save Strockrose property an estimated $42 million in hot water costs within 10 years.
Today, you can purchase and install a smart home device with sensorial capabilities from your standard hardware store. With the costs of data storage, connectivity and sensors rapidly decreasing, it is expected that buildings should be adopting IoT applications at a much higher rate. Sensor deployment in the commercial building sector is likely to grow to nearly 1.3 billion by 2020.
The Edge building in Amsterdam, whose main tenant is consultancy firm Deloitte, sets a new standard in smart buildings. Awarded the BREEAM 2016 Award for Offices New Construction, The Edge is equipped with 28,000 sensors measuring temperature, light, motion and humidity which workers can control using their smartphones.
“When the board asked me to construct this building, I made sure it has everything – like “internet of things” sensors, sustainability and integrated those into a data analysis platform,” said Eric Ubels, former CIO of Deloitte. The company collects data daily to monitor how the building is interacting with its occupants, displaying a variety of real-time data points, such as a pie-chart showing how much coffee is being consumed in the building at any given time.
This data indicated that milk-based coffees were the more popular choice, and milk was frequently running out – so Deloitte had the manufacturer issue new bespoke models with much larger milk compartments. It’s a trivial but interesting example of how access to data can improve and streamline a worker’s daily life.
Create value through differentiation
IoT-enabled buildings can generate huge quantities of information and owners have this opportunity to differentiate themselves by using the data to identify unmet occupant demands. By offering services their competitors lack, it is an opportunity to provide a more sophisticated experience, transforming the tenant’s experience – and ultimately commercial buildings exist to serve tenants.
It is expected that the widespread use of smart devices in intelligent buildings will be the first step toward the creation of “smart cities”, IoT technology offers many benefits though its implementation largely remains in infancy. Unlike facilities management companies like ISS, construction and real estate industries are still firmly in the “research” phase of their IoT journey.