The Internet of Things

Operational Efficiency and Cost Savings Through Connectivity

 In easy to understand, non-technical terms what makes the Internet of Things (IoT) so important to the CRE Community

There are many articles that try to define IoT and explain the value it will bring to the commercial real estate industry. Most are overly technical, or as amorphous as the IoT Wikipedia definition, “The Internet of things (IoT) is the network of physical devices, vehicles, home appliances, and other items embedded with electronics, software, sensors, actuators, and network connectivity, which enable these objects to connect and exchange data.”

I’m sure you are asking yourself, what in the world does all that mean for me as a CRE professional? How is IoT going to help me develop new properties, construct profitable venues, attract and retain tenants, better manage existing structures and increase their value over time?

To the Real Estate community, the Internet of Things should be seen as an overarching concept that represents the wired, or in most cases, the wireless collection and analysis of sensory data from almost any electro/mechanical or computer based device or system that makes up a commercial venue’s base building infrastructure. This is real-time data-driven, fact-based digital input that is voluminous, detailed and accurate. It is not data gathered by hit and miss empirical human experience or experimentation as is the reality today.

The most salient advantage, and the real value and power of an IoT enabled building is its ability to collect, aggregate and analyses all incoming data points and present a holistic view of any predetermined aspects of all the electro/mechanical devices and building system’s in any given structure.

The whole concept of IoT is still in its infancy, but early results clearly portend the virtually limitless insight and actionable contributions it will make to the CRE developer, building owner and property manager.

To create that holistic presentation a significant number and variety of sensors feed operational data to a central IoT processing/analytical

platform. Here are a few that are being deployed today.

  • Temperature sensors
  • Proximity sensor
  • Pressure sensor
  • Water quality sensor
  • Chemical sensor
  • Gas sensor
  • Smoke sensor
  • IR sensors
  • Level sensors
  • Image sensors
  • Motion detection sensors
  • Accelerometer sensors
  • Gyroscope sensors
  • Humidity sensors
  • Optical sensors
  • Air flow sensors

With sophisticated analytics programs processing an armada of sensor input there is little that is unknown about the interworking’s of IoT enabled commercial structures.

Staying within the office and hi-rise residential sector, let’s talk about IoT by what it does or can do in three principal areas.

  1.  Monitor, Control and Predict
  2. Safety, Security, Employee/Tenant Comfort and Well Being
  3. Bottom Line P&L, Risk and Liquidity Management

 Monitor, Control and Predict

Pennies per square foot can make the difference between profit and loss. IoT enabled buildings provide direct, accurate, continuous and useful feedback, both in real time and over time in regards to all electro/mechanical building devices and systems.

  • Monitor:
    • Continuous status read out
    • On, off or malfunction
    • Operating within normal design parameters
    • Proper sequencing at the right times of day/night
    • Alerts to any abnormality
  • Control
    • Remotely make large or small adjustments to any device or system for better performance
      • An example is the use of motion and occupancy sensors to regulate air-conditioning and lighting in real time.
    • Predict
      • Are systems getting more efficient or less efficient over time
      • Do they cost more to operate today than in the past
      • Frequent calculation of TCO
      • Is it time for maintenance, or has the time come to replace
      • All this makes the total cost of ownership more accurate and drives the budget for both opex and capex with fact based data now and in the succeeding years.

Security, Safety, and Employee/Tenant Comfort and Well Being

Upper most in everyone’s minds is security especially in big cities. Gone are the days when a few cameras strung at the front and back doors made the building secure. Air and water quality and the absence of harmful chemicals run a very close second to security. One negative incident can do long term harm to a venue’s reputation. Today, too hot or too cold doesn’t fly, tenants want “just right”.

  • IoT brings together the input of hundreds of thousands of sensors that dramatically increase the ability to make any commercial building secure, safe, free of harmful toxins and always comfortable.
  • Regardless of cause we are clearly in a period of climatic change. As the likelihood of severe weather increases so does the value of disaster preparedness. There are special weather sensors that feed weather data into the IoT mix adding to the holistic approach to better building performance.

 Bottom line P&L, Risk and Liquidity Management

As all investors, REITs prosper by knowing when to buy and when to sell a property. They are continuously rebalancing their portfolios to maximize profitability. Having in-depth knowledge of the property is key to knowing when to pulling the trigger. Having IoT enabled buildings provides that critical insight better than any other thing or process. The overwhelming amount of data which contributes to the accuracy of the analysis is much more credible and defensible. With extraordinary depth and accuracy it can bring together, at a glance, numbers and facts necessary to make important decisions concerning the viability, profitability and the all-important valuation of the building.

IoT is enabled by some new underlying technologies called NarrowBand IoT (NB-IoT), LoRa and Sig-Fox. These innovations are fundamentally Low Power Wide Area Network radio technology standards developed to enable a wide range of devices and services to be connected using various telecommunications bands. I’ll breakdown the technobabble and tell you in plain speak what you need to know about what makes IoT tick in a succeeding article.

IoT may seem a bit futuristic today, but this is one phenomenon that is guaranteed to be CRE industry bedrock very soon.

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As a contributor to Connected Real Estate magazine online and print I will be closely following IoT and writing about it on a regular basis.   If you have an immediate need for additional IoT information contact Bob Butchko at bobb@fifthgenmedia.com or 973.244.5868 x104 (O), 302.515.4811 (M)

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