The CRE market faces a fundamental challenge. How does one modernize an existing building? Whether motivated by tenant concerns, building efficiency or sustainability initiatives, building upgrade projects present major challenges to building owners and operators.
Every building faces obsolescence. Modernization extends the useful life of buildings, and increases the ultimate value of the underlying CRE asset. The asset digitization trend within the CRE market has accelerated the obsolescence issue for buildings generally.
Industry 4.0 demands business transformation and provides the underlying driver that underpins the acceleration of asset digitization across industries. Digitizing assets ultimately delivers real-time visibility, which drives needed business intelligence.
Decision makers at all levels increasingly struggle due to the absence of visibility in their area of responsibility. Does a building engineer know the real-time operational status of critical equipment in a building? Does an asset manager know the relative contribution of energy consumption of lighting and HVAC systems across buildings in a portfolio? Does a sustainability director know the performance of a building portfolio relative to energy efficiency and conservation initiatives?
Buildings that haven’t been digitized have a level of opaqueness that blocks business transformation. How does one move forward? Three challenges of modernizing existing buildings are discussed below.
Project Workflow Matters
Cost will always be a factor in any building modernization program. For decision makers, building modernization programs will always consider ROI as one of the main factors to be considered.
Notwithstanding cost, project workflow represents a major logistical challenge. As the modernization project is directed to an in-service building, the project will impact existing tenants. Minimizing that impact will require unobtrusive installation and commissioning of the modernization project. Wireless smart building technology can play a key role in that regard.
More importantly, the time-to-digitization is a key metric for building owners and operators. Scoping, installation and commissioning of a modernization project that takes months is objectively unacceptable.
Project workflows that span days instead of months, will provide significant operational value that cannot be directly measured via ROI. Again, wireless smart building technology can deliver project success; don’t sign up for the frustration of waiting months for asset digitization.
Tenant Experience Rules
The benefits of asset digitization go far beyond building owners and operators. Building modernization has the potential of delivering real value to tenants. The very shift in business focus from products to services highlights the opportunity at hand. The CRE industry can deliver far more than a hard asset usable to tenants. The Space-as-a-Service trend certainly signals a transformational shift because the “real estate industry is no longer about real estate.”
Let’s put the larger debate aside for now and focus on a very small tenant service example, Indoor Air Quality (IAQ). Tenants care about IAQ. If given a choice about whether they would want to know the IAQ levels in their space, a tenant would undoubtedly say “Yes!”. Building owners and operators wouldn’t dare ask that question because of their fear of the response they know is coming. In true asset digitization of CRE, IAQ will be used by tenants as a factor to evaluate potential space to lease. Leasable space that features real-time IAQ monitoring will be inherently more attractive.
IAQ illustrates but one example of a driver towards building modernization. Tenant building services matter. If your building modernization program does not account for expected tenant services, then your modernization initiatives may be missing the point.
Smart Building IoT Retrofits
The Internet of Things (IoT) excels in delivering cost-effective building modernization in retrofit projects. Wireless IoT platforms that provide anytime, anywhere access to real-time cloud dashboards should represent the minimum of expectations.
Aging buildings feature aging sensor infrastructures such as a Building Automation System (BAS). If the BAS cannot provide needed sensor data, then the building is functionally obsolete. Modernizing a BAS is not only cost prohibitive, but also violates the mandate of efficient project workflow.
IoT platforms are transforming the way stakeholders interact with the CRE space. Wireless IoT retrofits can deliver needed real-time visibility to environmental conditions such as IAQ, energy consumption through metering/submetering, and to HVAC analysis driving building performance and sustainability trends.
IoT specializes in addressing many of the primary challenges to any building modernization program.
IoT is modernizing existing buildings today. The Smart Building market has advanced quickly in step with the demands of the CRE market. Market leaders see IoT as a solution, not a novelty.