According to a report released in the first quarter of 2018 by the National Association of Realtors, the national average for office vacancy rates increased 1.7% in the fourth quarter of 2017 due to supply outpacing absorption.
This trend poses a threat to net operating income (NOI) and the expected return of ownership for commercial office real estate. Real estate companies would be wise to recognize that operating expenses are not as fixed as often assumed.Read More
Those in charge of commercial real estate are now aware of how much value equipment-level fault detection technology can provide in terms of lower operating expenses and improved tenant comfort. In today's video, Felix Lipov explains the criteria that should be used when evaluating fault detection technology to get the best system for your portfolio.Watch Video
There are hundreds of millions, if not billions, of dollars at stake and nearly limitless new technologies to evaluate. Given this, it’s not hard to see why many companies are finding it challenging to implement technologies at scale.
How can those in charge of technology adoption in commercial real estate cope with such a rapid influx of emerging technologies, and what strategies are the leading companies using?Read More
Simply making something available does not necessarily mean that it will be applied correctly, or even used in the first place. As the pace of technology deployment in commercial real estate quickens, the likelihood that tools adopted in the boardroom are not being used in the mechanical room is increasing in kind.
Technology deployments can become more effective by avoiding the pitfalls that lead to poor internal adoption.Read More
There are a lot of savvy folks at the intersection of real estate and technology working to figure out how the Internet of Things (IoT) can improve asset performance and lower costs. In today's video, Derek Cedarbaum shows how different IoT solutions can best be utilized depending on the situation.Watch Video
To compete effectively in today’s real estate market, companies not only need to adopt technology, they need to adopt the right technology.
We’ve explored this topic from several dimensions, but before those details can be addressed, there is a more fundamental question that must be answered: whether a given technology is horizontally or vertically aligned.Read More
Many real estate firms tend to wait for a well-proven ROI before making tech investments. Even those that recognize the economic value of the IoT may forego investments because they are unable or unwilling to bear the upfront costs.
Recognizing this, government entities and non-profit organizations have created a web of incentives for landlords to implement IoT and other “Smart Building” technologies.Read More
A great irony persists when calculating the return on investment for Internet of Things (IoT) technologies in commercial real estate: The value of the IoT lies in the data it generates, but to calculate this value exactly, data are required.
For once, it is not enough to simply say that the real estate industry is slow to adopt new technology. There are inherent aspects of the business that make exact calculations difficult.Read More
In a previous article, we explained what to look for in a tenant submetering service to avoid being locked in to poor service, billing discrepancies, and lack of flexibility – the Death Trap.
But to the surprise of many owners and operators, an older submetering infrastructure does not necessarily mean that there are no options for changing service providers. The next question is inevitably “how?”Read More
According to a recent US Department of Energy report, the number of LED installations has quadrupled from 215 million units in 2014 to 874 million units in 2016. Despite this staggering growth in the adaptation of LED lighting, LED market penetration is still at only 12.6%.Read More
The term “smart” is used to describe a wide variety of technologies—cars, watches and even light bulbs.
But it’s not always easy to know how exactly this revolution will impact you as a maintenance professional. How can you use sensors and software to take the term “smart maintenance” from buzzword to practical facility improvements?Read More
Real estate companies are beginning to realize a hard truth: It is no longer a question of whether they need an Internet of Things (IoT) strategy, it’s a question of how and when.
With that in mind, nearly every department is scrambling to make sense of the dizzying number of options, and to create a coherent strategy.
Tenant amenities have progressed, but how properties are actually operated remains tragically stuck in the past; it’s clear that technological progress has not been even.
Building operations are like the engine that makes your car go. It doesn’t matter how nice that new paint job, if it doesn’t get from point A to B, the passengers will get frustrated.
It is a natural tendency for large organizations to create silos for different departments. Silos provide the structure that promotes specific expertise and a linear flow of information. But silos also cause problems, namely a restriction on the information, collaboration, and focus outside the department.
In building operations, most real estate companies have created distinct silos for maintenance and energy management. On the surface, this makes perfect sense.
Few real estate companies can honestly state that there is a culture of continuous improvement. Even portfolios that are operated exceptionally well rarely can point to cultural reasons for the success. More likely, there are a few highly experienced building operators who know how to fix the myriad of problems that arise in buildings on a regular basis.
What are landlords and property managers supposed to do when the current crop of highly skilled individuals are no longer around?
Many properties utilize meters for individual tenant spaces to collect data around electricity and water use, and bill each tenant for their share of total building consumption. Often, a third party reads the meters and sends the invoices on behalf of the owner or property management company.
In recent years, meters capable of real-time collection have enabled owners and property managers to digitize and automate their tenant submetering process.
With the growing excitement around the possibilities of tomorrow’s buildings, there is faith that “building management systems are the backbone of smart buildings.” Owners and operators are envisioning ways in which the traditional BMS can be expanded to become the source of data for how a portfolio of buildings is performing. Even for properties that have not installed a BMS, there is faith that advancements in sensor technology will make investment in a BMS more cost effective.Read More
“For a lot of facilities managers, if you asked them, ‘How does your HVAC equipment – your chiller or boiler plant, as examples – behave on a 60-degree day without humidity?’ or ‘How do they behave on an 80-degree day with high humidity?’ I think a lot of the time the answer is that the data isn’t really available,” says Mark Pando, Energy Project Engineer at EnertivRead More
The best operated portfolios don’t necessarily do more of any one thing. Instead, driven by a deep understanding of what is important, these industry leaders apply technologies, invest in equipment, and update operational strategies intelligently. Over time, doing all the small things correctly unlocks asset value that would otherwise have been lost to wasted operating expenses.Read More
In the early days, determining the effectiveness of a retrofit – measurement & verification (M&V) – commonly consisted of comparing baseline and post-installation expenses for the entire building. While methods have developed over time to focus more closely on the equipment that was replaced or upgraded, it is still largely a retroactive strategy.
But what if this process could be performed before the installation?
Due to the complexity of energy pricing, two identical buildings can consume the same amount of energy and have profoundly different utility bills. Demand charges are a reality for every building but with the right data it is possible to identify and solve the issues that cause high peak demand and expensive utility bills.Read More
Building operations and sustainability departments are under increasing pressure to contribute to the bottom line through cost savings. As real estate companies continue to trim their budgets, so continues scrutiny of building operations dollars.
And yet, there persists an assumption that automation through a Building Management System (BMS) will lead to “smart” buildings and improved performance.
Perhaps more than any other function, building operations in commercial real estate (CRE) is primed to reap the benefits of advances in Big Data and Internet of Things (IoT) technology.
However, to date, systems have been deployed piecemeal to address specific problems. Solutions have typically been implemented as siloed, expert-oriented tools lacking the ability to communicate or share data with other integral systems.
In office and apartment buildings across the country, operators are adjusting equipment systems and responding to issues so the rest of us remain comfortable.
But building operators are lacking the tools they truly need to excel at their jobs. That’s exactly where machine learning comes in.
In response to federal inaction on policies to address climate change, city governments have begun to aggressively take up the mantle. In few places has this been embodied more than in New York City by Mayor Bill de Blasio’s administration.
Instead of doing the bare minimum to avoid penalties, owners and operators can get ahead of the trend and make improvements on their own terms.
Opex savings have an outsized effect on asset value.
Here's an easy visual to understand exactly where those operating expenses are going, how to save costs, and the massive effect it can have on asset value.
Surprisingly, real estate is still largely dependent on manual processes and personal relationships.
This is not necessarily coming easy; most owners and operators would still prefer to stick with a vendor or partner they know than to follow the cold, hard data. But will this change? If so, how soon?
The internet of things, big data, machine learning, artificial intelligence, smart buildings. Even for those in the industry, it’s hard to tell what’s real and what is just hype.
One thing is certain. Commercial real estate companies are deploying technology today that is revolutionizing how they manage their assets.
When the decision is made to submeter tenants for their utility usage, the owner or property manager is making a choice that could impact their bottom line for decades.
Even with tenant relationships and potentially millions of dollars at stake, choosing a submetering vendor is often an afterthought. More often than not, the company in charge of submetering is selected by the design engineer because they provide cheap hardware and have been around since the 1980’s.
A convergence of trends is compelling real estate service companies to become drivers of technology adoption across the industry.
Whether due to increasing competition, pressure from owners and occupiers or improved technology, major service companies are shedding the “slow to adapt” label that is often associated with commercial real estate.
Real estate owners and operators are increasingly turning to technology to reduce costs and improve net operating income in the face of flattening revenue progression.
Here are five ways technology is being used to optimize real estate operations.
The manual process of utitliy submetering & billing is inefficient, inaccurate, frustrating and costly.
An automated tenant submetering process is performed efficiently and with 100% accuracy.
This infographic compares the two processes point by point.
Since the Financial Crisis of 2008, the real estate industry has seen a recovery and large returns in many markets (albeit not all). Now, a decade later, high yields are no longer guaranteed.
With revenue progression relatively fixed, the focus for CRE owners and operators should be on cost reduction and tenant retention for added value and stabilized NOI.
Many Commercial Real Estate (CRE) companies bill their tenants each month based on the amount of electricity, water and/or gas they consume. Generally, this is a smart business move.
There's just one little problem. The current process of billing tenants for their actual consumption is inefficient, inaccurate, frustrating and costly. Here are the biggest problems with tenant submetering as it stands today and how technology can help alleviate them.
For many operators in commercial real estate portfolios, it’s a struggle to find the time to plan and implement a comprehensive maintenance plan.
Under-maintaining assets leads to a “debt” that is impossible to recover from. Worse, this reactive maintenance process relies on tenant complaints for fault detection.
Get a visual breakdown of how Enertiv's Operations Performance System works at different levels of a building. From tracking fan belt failure on the roof, to submetering tenants throughout a building and all the way down to chiller performance in the basement.
Transparency is an abstract concept, but it is something that building operators need to do their job effectively. This visual will help you see what we mean by transparency into your assets.
Imagine it’s 1:14 AM. Demand for your exhaust fan was interrupted and the fan scheduling was reset to factory settings. As a system essential for the health of occupants, it should be running 24/7. Instead, later that night, some of the cleaning crew gets sick due to a lack of ventilation in the basement.
Unfortunately, this is not a hypothetical. This is a real situation that occurred with an Enertiv customer, and illustrates well what we mean by “critical” equipment.
According to the Building Owners and Managers Association (BOMA), electricity and maintenance costs account for roughly $3.50 of the almost $8.00 per square foot in annual operating costs.
Given the scope of the problem, it’s surprising that so many landlords treat maintenance and energy costs as fixed and unavoidable. Management of these systems, and their associated costs, are essential to maximizing asset value, yet a shockingly few number of portfolios have an effective strategy in place.