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Language is a complicated thing. Our ability to communicate benefits us in innumerable ways but it can also come at a cost. Like the people that create them, languages change over time to accommodate new cultural, societal, and technological paradigms, and every time they do they leave remnants of previous meanings behind like landmines ready to upend a conversation.

Those that miss an important “update” to the contemporary vernacular are often the unintended recipients of confusion. This disorientation is often compounded if the speed a language changes is accelerated, as it often is when it pertains to technology. In short, speedy changes to a lexicon can create layers of contextual errors between parties in a conversation with both misunderstanding what the other party means. There are many good examples of this phenomenon in our everyday lives but the one I choose to follow up on today is “Smart Building”.

A ‘Smart’ Building Needs Redefining

It’s hard to pinpoint when the first concept of a smart building was introduced but its highly likely that it occurred somewhere in the early to mid-1980’s during the beginning of the introduction of the computer into the mainstream workspace. Since then, the definition of a smart building has evolved alongside the technologies that were employed to create them. At the time, what people considered to be smart technology typically involved the broader definition of automation.

Technologies such as HVAC systems that turned on automatically based on building hours, automatic doors with RFID card readers and/or key fobs, proximity sensors connected lights that turn off on a timer, etc., are all considered by many to be smart technologies. The problem is, I don’t think that definition fits with the current expectations of a smart building anymore. There is an inherent conflict that has begun forming between the slow and reliable brick and mortar thinking of the commercial real estate industry and the fast-paced technological innovation occurring in smart infrastructure projects. With the irony being, stakeholders in the real estate industry would tend to benefit most from the innovation that is occurring within the connected technologies ecosystem that is forming the backbone of the new definition of a smart building. It’s time for an update.

A ‘Smart’ Building Needs Less Automation

In lieu of the traditional process of defining a smart building in terms of automation, we should start talking about what they should do for us. We need to move our expectations away from the world of simple passive technologies encouraging automation to an ecosystem of dynamic technologies and services that learn and improve over time. A smart building:

  • should not just be a system of automatic processes but a dynamic infrastructure that constantly improves on itself over time leading to better services and amenities for the end-users of the building.
  • a smart building is supposed to attract high-quality tenants and better an asset’s value. Those same tenants now demand more from the “smart” title now, so owners/landlords/stakeholders need to constantly evaluate what tenants need and want now for any smart strategy to pay off. Upgrading to a smart platform is not free after all.

Think about it this way, in the 1960’s people were “wowed” by the Star Trek and the concept of Captain Kirk walking onto the bridge of the enterprise through doors that opened automatically as if by magic. It was the future! And in the future doors opened without you doing anything. Fast forward to today, I have yet to meet a tenant that stopped a tour of properties to admire the automatic sliding doors at the entrance. It won’t sell them on the building, this convenience is expected. The same can be said for automatic lights, key fobs, parking counters, and basic building apps, they are all expected tools that do what they are told.

A ‘Smart’ Strategy Needs Intelligence

So if you are going to be building a smart strategy for upgrading your building you better be thinking long and hard about the cost and benefits of every piece of technology you put into a building. Automation is demanded not wanted, it needs to be in a project, but it should never be considered a technology upgrade that can be marketed to new tenants or as an amenity to attract higher net effective rates. Remember, as you could forget, these upgrades cost cash and if the capital cost to the building only allows it to remain on par with the surrounding comparable market you won’t likely be seeing much in the way of an ROI.

Smart buildings, to me, mean that the building is just that: smart and learning.

It will, of course, utilize automation and efficiency technologies, which can net some serious savings, but it is also designed to learn the patterns, desires of the tenants, and systems that inhabit it. Imagine, as a small example, that the building will understand how you like your coffee in the morning and promote retail coffee shops in the area or, even better, offer a direct way for you to order your coffee in advance of arriving so it’s ready to go when you get there. Sounds like a convenience, but it is so much better than this.

The above example is a win-win for all the parties with a stake in occupancy. It has become a beneficial experience to the occupants of a building encouraging them to want to be a tenant in the project and an added sales opportunity for the retailer that improves business and thereby translates to a retailer willing to pay more to operate within the building. I understand that this is a simple example, but it directly translates to the spirit of any smart infrastructure project or upgrades, improving the tenant experience while improving the asset value.

The future of smart in the construction industry

Eventually, the smart systems and services that we think of as being on the edge of technological development will become as standard as the sliding Star Trek door, but we are not there yet. Within the next decade, nearly every competitive commercial real estate portfolio will need to be going smart just to keep up with their neighbors. Landlords just need to ensure they know what they mean when they say smart building and that their definition of a smart building is aligned with the tenant’s perception as well.

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