The Internet of Things (IoT) has received varying degrees of coverage over the past few years, and it’s undoubtedly progressing rapidly. Many laud the advancements in technology that’ll allow all of our devices to be linked together, including computers, appliances, and cars. One industry that clearly sees the potential for IoT applications is commercial real estate.
Intelligent buildings give owners and facility managers the opportunity to streamline practically every system in the structure, which can lead to happier tenants, increased sales, and less waste. This article provides an overview of some major commercial real estate players and discusses how they’ve been adopting IoT today to shape tomorrow’s world.
How IoT Works
Before discussing IoT applications in commercial real estate, let’s make sure you understand how IoT functions differently in different use cases. For a general homeowner, they may program the alarm clock to trigger the coffee maker as soon it goes off. The coffee maker may one day be linked to the homeowner’s car so that it’s nice and warm by the time the homeowner leaves for work. In commercial real estate, however, IoT can be used to improve the quality of life for tenants while benefiting a building owner’s bottom line.
For example, IoT can help store owners collect, catalog, and analyze their data, so they can see the larger trends of what people are buying and why. IoT can theoretically provide store owners with information about every person who walks through their door. This way, the clerks know what the customer has purchased in the past, when their last transaction was, and which areas of the store they’re likely to visit.
IoT can also show a building manager who’s using the most power and what it’s being used for, so they have the opportunity to communicate with their tenants about their energy use. They show owners how they can better make use of their space so as not to waste a dime on anything they don’t need.
IoT Applications in Commercial Real Estate
Commercial real estate has already started to see changes in its operations due to IoT. Those changes affect the very construction of the building. Connected devices make it clear what’s being delivered and who’s taking care of which task. They immediately alert people of last-minute changes, so there’s less confusion for workers regarding their directives. They can be designed to connect all of the major systems in the facility. From HVAC to lighting, IoT can show how the building’s units function as a whole.
Ultimately, leveraging IoT applications in commercial real estate responsibly can lead to cost savings through better operations. For example, when building managers have operational data, they can see just where and how to can make changes to reduce pressure on their equipment. Such insight leads to less maintenance and replacement costs. And as workspaces begin to change, leaving behind the once-standard cubicles of the past, real estate management teams can use IoT to optimize their long-term plans and budgets.
Retention, Relationships, and Reputation
When tenants know they can count on the facility they’re renting, they tend to be more satisfied. At the very least, they have better relationships with the landlords, facility workers, and owners. Using the IoT correctly can translate to smart decision-making and better security. It means fewer power outages and service calls. When tenants trust they’re in good hands, they contribute to the long-term reputation owners need to secure future tenants.
Commercial tenants can also use the IoT to improve their businesses. Once they begin to learn the technology, they can incorporate it into their own daily operations. With greater efficiency and employee satisfaction, tenants may raise their business’ profile and potentially the profile of the area they are in. Building owners can’t mandate certain technology upgrades for their tenants. However, they can expose tenants to the power of IoT and explain how they can use it to better their businesses.
Getting Started with IoT in Real Estate
Many commercial real estate owners may be surprised to learn just how easy it is to transform their building through IoT. It doesn’t have to mean rewiring the entire building or buying an expensive all-inclusive package; instead, owners can use individual sensors that can be placed on their appliances to connect them together. There is also a broad selection of teams and professionals who can set it all up and provide advice to owners about how they can get the most from their IoT application.
Commercial real estate has always been an attractive option for investors and professionals alike. The profits that can be made in this industry could go head-to-head with practically every other venture on the market today. However, technology has begun to change the expectations of commercial real estate, and it’s likely to keep going down this path. Owners and investors who understand how the advancements of today will impact the profits of tomorrow stand the best chance of thriving in the future.
IoT has already begun to make increase efficiency in construction, building management, and tenant satisfaction. Its capabilities and features will continue to grow and adapt to new building needs as the years go by.
Justin Havre is a Calgary native and owner of Justin Havre & Associates. Well known throughout the real estate industry, Justin has given lectures at international real estate conferences and works closely with his team to ensure every last person is performing to their best potential.