“No one understands buildings more than the people that keep them operational and comfortable. In the public view, building operators often fall into the shadows behind shiny new technologies, but our focus shouldn’t be binary (i.e. people or tech),” said Lauren Long, Site 1001’s Director of Marketing, previously. “The true value of tech emerges when it functions as the communication gateway between what a building is saying and the people who are listening.”
That gateway is, of course, fundamental to the value of technology. The smart building generates data, partially to automate processes and primarily to provide the building’s human operators with information and insight. However, the gateway itself is just one cog in the works, the quality of the data supplied by the building and the level of understanding of those listening are equally as important. Failure of any of those cogs would reduce the value generated.
What Long highlights is, perhaps, that there is a disconnect between those who operate buildings and those who develop technology for buildings, and as buildings become more technology-rich that disconnect becomes more evident. The global real estate market is expected to generate a revenue of $4.3 trillion by 2025, according to Grand View Research, making it very attractive to technology companies.
In New York, a panel at the recent smart building event entitled “Your Building is Talking, Are you Listening?” sought to tackle issues related to building operations. The panel developed a definition of a smart building as one that incorporates an internet of systems, rather than merely an internet of things, and one that increases asset value through software-enabled participation of the operator, thereby developing intelligence through data. They also agreed that artificial intelligence is not a solution in itself but a powerful technology to support human intelligence.
The value of a building is not the product of its location, materials, and technology, or at least it shouldn’t be. The value of a building should be the product of its operational performance. It is not enough to have the technology; you must be able to use it to make occupant’s lives better. One building may have more expensive technology, but occupants may be healthier and more productive in another. If a tenant wants to choose the best building, they don’t care how advanced the technology is just how it will impact their business.
The first stage of that is to create an accurate way to measure the physical, mental, and emotional well-being of building occupants or identify the reasons for their productivity in different environments. That type of analysis can only be achieved using a broad set of data, averaged over a long timeframe, and with a large set of occupants, anything else would be subject to a range of other influences.
“We must examine maintenance and operational records for upkeep and performance information, IoT and sensor data that fill in gaps left by meters and smart building systems, and, most importantly, human-generated information like complaints, comments, and work order requests that provide the granular user feedback on whether the smart building is performing well or poorly,” suggest Site 1001 in an article for IoTforAll.
Commercial real estate is already a relatively fast-paced world where this type of long-term analysis does not align with sales strategies. The growing influence of the technology sector is only increasing the speed at which the building sector operates. For many in the industry, like Franco Faraudo, co-founder of Propmodo, enforcing this kind of performance-based valuation model would be one step too far for a building sector already struggling to keep up with the rapid new pace their industry is evolving.
“I have written about how the KPI for the office building of the future might be the happiness of its occupants, not their productivity, but I do think that we need to take things one step at a time,” says Faraudo. “We are already asking property professionals to add another layer of complexity into an already incredibly complicated and high-risk task. Asking them to quantify something as indefinite and enigmatic as human health and wellness might be a bridge too far.”
Furthermore, if we continue to value buildings based on their physical characteristics as opposed to their operational performance, we may be holding back the sector as a whole. If a tenant can be more satisfied with a lower value building because it operates better, then the smart building proposition is undermined. The solution for bringing balance to the building sector comes back to those who have lost their voice in the industry - the building operators.
“These CRE conferences need to include more experts who know buildings better than anything or anyone else,” says Site 1001. “Not only will those experts add a new and very necessary perspective to discussions; they will shed light on the fact that optimal building technology platforms won’t replace the humanity of buildings but strengthen it.”