Developers are harnessing the growing obsession of data to improve office buildings in ways that can cut costs and streamline operations, saving owners millions of dollars each. year.
This sector, known as real estate technology, or proptech, has become a booming field in commercial real estate as real estate managers seek to use data collection and nuclear intelligence. created to help control systems like heating, lighting, air quality and even labor flow.
As building owners tackle the complex problems of safely returning workers to the office following the pandemic, investors are pouring money into proptech startups like Cherre and HqO.
But this data collection is raising concerns about cybersecurity: A 2021 Deloitte report found “cyber threats are becoming more sophisticated.” Thieves have become more adept at breaking into, even using the thermometer in the aquarium to access the network of a Las Vegas casino.
Arie Barendrecht, chief executive of WiredScore, an organization that certifies digital infrastructure in buildings, says the increasing use of internet-connected sensors is turning high-rise offices into ” covered computer ”.
“There’s a downside to everything being smart and connected, and that’s the increased risk,” he said.
But developers believe the industry is on the cusp of a significant change: The reappraisal of post-pandemic business real estate plans amid an oversupply of office market means it will. There is more pressure to better understand and improve commercial real estate.
“There will be a significant increase in the information we have about how people use our buildings,” said Charlie Kuntz, innovation officer at Hines, a major real estate investment firm. Popularity will be more common ”.
In Houston, for example, the planned 1550 on the Green office tower aims to be a modern addition to the downtown area; it is scheduled to open in 2024. Skanska, a Swedish developer, has hired Danish architect Bjarke Ingels to design the 28-story tower, which will have a range of environmental controls and features of smart building.
The project will include a network of sensors that track motion, power utilization and efficiency. Skanska, which handles both development and construction, plans to install thousands of sensors to collect anonymous data on its 375,000 square feet, including cameras, optical sensors, parking scanners. and a QR code reader on the security turnstile.
“Before, we would build first and then talk about adding a certain technology to a building,” said Robert Ward, president and chief executive officer of Skanska USA Commercial Development. said the president and chief executive officer of Skanska USA Commercial Development. “Now, it’s, ‘How do we build buildings around technology?’
A variety of apps and sensors as well as artificial intelligence analyze the data they collect, providing tenants with more information about productivity. The immediate focus will be on how to safely get employees back into the office, but the technology also promises to uncover areas for streamlining. Some sensors will be able to monitor air quality and even environmental performance, improve energy efficiency, and meet urban emissions regulations.
Kevin Danehy, managing director of North America at Willow, a construction technology company in Sydney, Australia, said this data will eventually become part of the standard disclosure between buyers and sellers. real estate.
“The only place where owners and occupants have ever had a common interest is the foyer,” he said. “Only in the last three or four years have these systems become affordable and scalable.”
Vik Chawla, a partner at Fifth Wall, a venture capital firm that has supported proptech firms such as Enertiv and Loft, said the pandemic has expanded opportunities for the sector. He sees the coming “digitization of office assets”.
“Employees want a higher tech, touch experience,” he said. “There will be more investment orders this year and with offices empty, this is the perfect time to retrofit.”
The idea of tracking how workers use space is a core tenet in the corporate philosophy of companion giant WeWork, which often brags about its technological prowess.
“Despite the hype and fanaticism, WeWork has succeeded when it comes to building optical sensors,” said Dan Ryan, chief executive and co-founder of VergeSense, a company that makes optical sensors for buildings. Space is flexible and challenging for use. “The philosophy that we can all operate remotely, is being adopted by every company.”
Technology being used to monitor office activity tends to be unnecessary. The VergeSense sensor, shaped like a smoke detector and roughly the size of a deck of cards, counts the number of people in a space and measures the number of people walking. The company has a proprietary algorithm that can tell if a space is being used passively by someone who left in the moment. Cisco and other businesses with 10,000 or more employees have registered to use the device with the subscription service.
In the past year, startups have received soaring interest from customers. HqO, which supplies the operating system for the office, raised $ 60 million last year. VergeSense, which raised $ 21 million in two funding rounds, announced a partnership with global real estate firm JLL to install sensors in a number of buildings across the country. By the first quarter of 2021, VergeSense had analyzed more than 40 million square feet of real estate globally.
Established developers have kept up with the pace. Hines has set many hardware and software tests over the past year. At 717 Texas in Houston, an office tower in the city’s Theater District, Hines deployed more than 150 sensors to count people and measure indoor environmental quality. The company is also experimenting with using cameras in the corridors of several buildings to provide “consistent, useful information for tenants”.
At Atlantic Yards, an office complex in Atlanta, Hines worked with Microsoft, a tenant there, to see if the sensors could help improve employee efficiency. And at 10/120 South Riverside Plaza in Chicago, Hines started a project that combines room sensors and occupancy with network infrastructure to see what amenities and technologies are being used in areas. general.
But some industry insiders have doubts about this technology. Greg Fuller, president and chief executive officer of Granite Properties, which owns and manages 10 million square feet of office space, says the technology needs to prove its accuracy before it can be truly useful. .
Granite is working with Fifth Wall to help understand what technology offers. “Real estate companies have realized they have to compete and keep up with technology,” he said.
Others have raised questions about privacy and cybersecurity. VergeSense, Hines and Skanska all say they use only anonymous and non-employee data, and the new SmartScore certification introduced last week by WiredScore covers cybersecurity certifications and has been in the dozens. Globally accepted major homeowners.
Doug Stewart, head of digital consulting at Cushman & Wakefield, says the fill rate track expansion can be very lucrative. “The important thing is to know who are three people in a conference room, or who are those three?” he say. “The slippery slope is when we start naming.”
Others, however, believe that building data can help provide information about the design of the next office.
Skanska’s 17&M office building is designed from the inside out with smart technology, “like building an engine in front of a car,” said Ward. The purpose of data collection is to create a continuous loop of feedback on design improvements.
Tenants will be interested in going back to the office, but the next few months after reopening could be an important decisive moment for companies curious about the technology.
“It’s the economic proposition,” said Chawla. “These technologies mean reduced risk, reduced operating costs and increased rent. They don’t do it because the technology is so cool. “