Real estate and facilities management (REF) executives have come under the spotlight recently as businesses realize the important role buildings play for the people who occupy them and the impact they have on the bottom line.
For REF executives it is both a stressful and exciting time, as they face more pressure than ever, tasked with delivering material differences to the working environment, meeting sustainability goals, unlocking financial value and solving problems before they even happen. Expectations are high.
At minimum, buildings must be cost effective, sustainable and have flexible spaces that foster productivity and wellness of their occupants. In short, buildings need to become much smarter. Job descriptions for building operators are almost unrecognizable when compared to those ten years ago, and the workforce is shrinking as the industry struggles to secure people with the right skill set.
Real estate and facilities management is at a tipping point where the only way to stay ahead of challenges is to harness the power of technology.
For the built environment, the technology with the biggest potential to impact on an organization’s bottom line is data analytics. Data analytics is a mature, proven technology to deliver insights into building and equipment operations in order to optimize the building’s performance. In the Real Estate sector this inexpensive and effective technology is commonly referred to as Building Analytics.
Commercial Property at a Glance
Keeping costs down has certainly not fallen off the radar of building owners and occupiers. According to the Reserve Bank of Australia, owning and leasing commercial property in major cities has never been more expensive. On top of this, high energy prices and facility management and maintenance costs (driven by Australia’s high labor costs), are real pain points. Keeping a lid on operational costs remains a high priority.
As budgets and headcounts in businesses are squeezed, an increasing amount of REF portfolio management is being outsourced to service providers. With this comes the need to ensure these partnerships are delivering outcomes and value for the business. This calls for access to accurate, real time information for productive discussions with service providers to achieve the best building performance outcomes.
Building owners are keenly aware that achieving high standards from the National Australian Built Environment Rating System (NABERS) is essential. This rating improves the market value of the asset and attracts high profile tenants such as government departments that specifically require high NABERS scores in their leased spaces. Government and large corporations leasing spaces act as an endorsement of the building and thereby drive the value upward.
Businesses have been acquiring technologies to give buildings more ‘smarts’, make them enjoyable to be in, and even give them a bit of ‘wow’ factor. Now they must be managed so REF executives can demonstrate return on investment.
Real Estate and Facilities management has shifted from ‘building centric’ to ‘people centric’. A growing body of research is demonstrating that creating better environments for building occupants drives productivity, supports wellness and stability in the workforce.
Buildings themselves are part of the solution to modern day health concerns with consideration given to encouraging movement, air quality, noise, and lighting.
Property owners and investors expect REF executives to constantly seek ways to keep ahead of obstacles and embrace new opportunities. The dynamic new demands of real estate and facilities management means an arduous task of analyzing complex data and managing large teams of service providers to deliver the best outcomes they can.
Real Estate and Facilities Management has never seen a more challenging or rewarding time.
The Role of Building Optimization
As demands increase, there is a tsunami of real estate and facilities technology entering the field. Digital disruption has been slow to impact the property industry, but now the dream of a central platform to manage an entire building is becoming a reality. However, as buildings and their facilities teams can be as different as the people they service, it can be difficult to know which solution will work best and deliver on the promised outcomes.
Building Optimization encompasses a holistic approach to applying technology, people and processes to the management of the building, so you can extract the best performance and value. Building analytics is just the start of the process. By capturing, managing and using insights from building performance data you can deliver better building performance at a lower cost than ever before.
Research shows that building analytics is second only to lighting upgrades for fast return on investment and this is as true for buildings with new equipment as it is for older buildings with aging infrastructure.
Many buildings have rich data sources in place, from sub-metering, to Building Management Systems (BMS) and IoT sensors, but this data is often siloed in different systems or not presented in a helpful way. For situations where data is not being captured, cost-effective alternatives to traditional sub-metering such as low-cost sensors and software meters are now widely available.
Armed with information accessed through building analytics, building operators can make significant changes to the built environment that directly impact on performance.
For example, a building with highly efficient HVAC equipment may still be wasting energy because the equipment settings have been overridden manually at some point in the past – this can lead to situations such as the air conditioning operating outside of business hours, which is easy to overlook. With building analytics this problem can be identified, and a more efficient strategy can be developed based on actual occupancy of the building.
Building analytics can also be the catalyst to bring both internal and external facilities management teams together and help them work smarter, not harder as a group. When data is shared, everyone is on the same page and the best outcomes can be achieved such as data-driven maintenance planning rather than having to make unnecessary maintenance visits.
Optimized buildings are the outcome of an ecosystem of technology, hardware, services and clever people, but as we look ahead building analytics will be the foundation on which the optimization of a facilities or real estate portfolio will be built.
Building analytics is not just a ‘nice to have’ technology that makes life easier. This approach to performance management presents a significant bottom line benefit for businesses.
REF executives can capture, manage and use building and equipment performance data to streamline the operations of real estate. The flow-on links directly to the bottom line, with reduced utility and maintenance costs, extended life of equipment, improved space utilization, and assured value from third party contractors and service providers.
Poorly run buildings deliver poor outcomes, no matter how high spec the infrastructure and equipment.
To create ‘Fit for Future’ buildings that run optimally and directly impact the bottom line, REF executives must embrace building analytics.
Looking for more guidance on how your business can leverage Building Analytics? Drop us a line today.
This is the first of a three-part series aimed at helping REF executives make meaningful use of building and equipment performance data to optimize the performance of their buildings.
Author: David Solsky, Chief Executive Officer and Co-Founder.